INVESTMENT banks have endured a torrid 2012, with worldwide fees down 14 per cent on the same point last year, according to data released yesterday by Thomson Reuters.
Total income across the sector – which includes everything from M&A advisory to capital markets underwriting – was just $51.9bn (£32.1bn) for the first nine months of the year, with JP Morgan taking the top spot in the league table, just ahead of Bank of America Merrill Lynch.
Europe was particularly badly affected as fees fell 27.6 per cent, in part due to the reduced number of major IPOs on the continent. The death of major flotations was reflected in the growing importance of fee income from debt capital markets, as companies increasingly choose to raise funds through bond issues rather than stock markets.
Meanwhile a separate study yesterday revealed the extent to which banks are relying on hedge funds to make up the lost income by providing services such as stock lending, financing and trade execution.
Research by data firm Hedge Fund Intelligence claims that Goldman Sachs is now the biggest supplier of brokerage services to the secretive industry, with more than 900 mandates and $222.6bn of assets.
Credit Suisse comes second in the “prime broker” standings, followed JP Morgan in third place.