Europe bears brunt of fall in investment banking revenue

EUROPEAN investment banks were among the worst hit by the fees downturn in 2012, according to data released yesterday by Thomson Reuters.

Worldwide fees fell by just 3.4 per cent to $74.8bn (£46bn) last year but the income from deals involving the UK, France and Spain slumped by more than 15 per cent.

“The Eurozone crisis is the overriding issue for investment banking fees, because you don’t do deals when corporate don’t have confidence in the market,” said Thomson Reuters research director Leon Saunders Calvert.

A slight uptick in the performance of the US economy saved the industry from a disastrous year but there were heavy falls in emerging markets, such as China and Russia.

“Despite the fact their economies are still growing effectively, dealmaking activity is reliant on cross-border investment from Europe and the US,” Calvert added. “When Western Europe is struggling internally then they’re less likely to make risky deals in emerging markets.”

Bankers looking for new markets should look to Mexico, Malaysia and Finland, where total fees rose by more than 25 per cent.