UK banks lose ground to US rivals on fees

Elizabeth Fournier

US, SWISS and German banks have all upped their share of the UK’s investment banking revenues so far in 2013, sending British banks’ own revenues from the sector to their lowest level in more than a decade.

UK banks pulled in just $372m (£247m) from UK investment banking clients in the first five months of the year, down 11 per cent year-on-year and the lowest since it slumped to $235m in 2002.

And for the first time in four years, US banks captured more revenue than their UK counterparts, taking a 38.2 per cent share of the market and making $527m from UK clients.

US banks are making the most from UK investment banking

UK banks’ market share fell to 27 per cent, down from 34.7 per cent a year ago.

Overall, UK investment banking revenue has hit $1.4bn so far this year, up 12 per cent on 2012 but well below the $3bn brought in by the sector at the height of the financial boom in 2007.

Equity capital markets deals led the growth, with revenues up 44 per cent on last year as the UK’s equity funding markets start to liven up after a lengthy lull in activity.

US giant JP Morgan topped the league table for the first time since 2010, taking 9.6 per cent of all UK investment banking revenues to make $133m so far this year.

Bank of America Merrill Lynch was second with 9.2 per cent of the market, while Barclays was the highest ranked UK bank, with 8.1 per cent.

RBS, which used to have a more meaningful presence in UK investment banking, was notable by its absence from the table after significantly shrinking the unit in recent months.

Meanwhile both Swiss and German banks – represented by UBS, Credit Suisse and Deutsche Bank – saw a 40 per cent year-on-year increase in UK revenues.

But Asia Pacific banks took a much smaller slice of the pie, with revenues falling 46 per cent to $56m.