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Investment bank fees soar to seven-year high, led by JP Morgan

[HONG KONG] Investment banking fees surged to a seven-year high of US$90.1 billion in 2014, driven by deals in North Asia and Southern Europe, with the huge North American market offering ballast in a sector increasingly expected to see some wobbles this year.

Fees for deals done in North Asia leapt 28 per cent to US$7.4 billion while Southern Europe saw a 29 per cent jump to US$2.6 billion, data compiled by Thomson Reuters shows. North America is still the supreme market for investment banks in absolute terms, generating US$47 billion in fees last year. That was three times more than that of Asia as whole.

JP Morgan topped the rankings for fees last year, taking home US$6.3 billion, followed by Bank of America Corp and Goldman Sachs. Bankers say they expect fees to climb even if a slower China and global geopolitical tensions put the brakes on deal-making this year.

"There are more active clients in the market and those clients are increasingly entering into more complex structured transactions which necessarily require financial advice," said Jeremy Fearnley, head of M&A for Hong Kong and Southern China for KPMG.

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"Clients are slowly becoming more accepting of the value of good advice and therefore of higher fees, increasing the yield from transactions." Initial public offerings accounted for 26 per cent of the global total, or US$23.4 billion, in a year best remembered by Alibaba Group Holding Ltd's record US$25 billion New York listing. Bond-underwriting was second. Mergers and acquisitions ranked third.