Investment bank fees boom

INVESTMENT banks have reaped a massive $48.9bn (£30.5bn) in fees in the first six months of this year, in the largest opening half since before the financial crisis.

Fuelled by a return to dealmaking by companies worldwide, fees taken by investment banks in the first half of 2011 jumped 23 per cent on the same period a year earlier.

Fees taken for mergers and acquisitions (M&A) advisory work totalled $17.4bn, an increase of 19.1 per cent on the first half of 2010.

US private equity firms were amongst the biggest fee payers for M&A work, as they exited investments snapped up before the recession.

Investment banking activity across the financial, energy and power sectors dominated the global fee pool, accounting for 43 per cent of all payments.

Fees taken from European and American deals increased by 26.4 per cent and 26.9 per cent respectively, while fees taken from Asia Pacific deals increased by 26.2 per cent. Fees taken from Japanese companies fell 23 per cent, after the devastating earthquake and tsunami hit appetite for transactions.

Wall Street banking giant JP Morgan topped the global league table for fees taken in the first of 2011, reaping $3.4bn in payments, or 6.9 per cent of overall “wallet share”.

Morgan Stanley booked $27bn in investment banking fees, an increase of 48.9 per cent on the same period a year earlier, the largest gain among all banks in the top 25.