Investment bank earnings fall in 2012 as bond markets boom

INVESTMENT bank earnings fell slightly in 2012 as the bond markets became the main source of income for the industry, according to figures from data provider Dealogic.

Total worldwide fees dropped 3.6 per cent to $67.1bn (£41.3bn), still well down on the pre-crash peak of $90bn in 2007.

A third of investment banking revenue now comes from selling fixed income debt products, while banks made just 20 per cent of their income from equity work, such as arranging initial public offerings (IPOs) and new share issues. Low M&A volumes also hit earnings as companies were reluctant to embark on ambitious expansion plans and income from direct loans to businesses joined the downward trend.

In the UK, Barclays knocked JPMorgan off the top of the fees table, with income rising from $210m to $305m. Despite this, the bank is considering the future of its investment banking unit amid growing pressure to split the business from its high-street arm.

Despite losing out in Britain, JPMorgan kept its position as worldwide “wallet share” leader with a 7.6 per cent share of global fees.