Numis struggled with the “effective closure” of the IPO market in the third quarter, with revenue falling ahead of the bank’s takeover by Deutsche Bank.
The London-based investment bank said revenue in the three months to the end of June came in below the first half, reflecting the “deteriorating market backdrop” across investment banking.
Although M&A revenue remained strong, intake from capital markets were hit by “cyclically low deal volumes”.
Numis noted revenue from capital markets was “materially below” the comparative period last year.
“Macro-economic concerns have resulted in a prolonged period of exceptionally low deal volumes across the market and the effective closure of the IPO market,” it said.
Macroeconomic volatility and surging interest rates have dented new listings and dealmaking as firms continue to swerve the volatility of public markets.
Data from EY showed the capital’s bourse registered just 18 new floats in the first six months of the year, raising a cumulative £593.
Numis suggested things are unlikely to get better with macro-economic pressures likely to persist through the remainder of the year, restricting deal volumes across investment banking products.
However, it noted its balance sheet was strong and it was “building the pipeline” to ensure growth when market conditions recover.
The update comes ahead of Numis’ takeover by Deutsche Bank, which is expected to complete in the final quarter of the calendar year.
In a surprise move, Deutsche Bank announced in April that it had agreed to buy Numis for £410m, a premium of 72 per cent to Numis share price before the offer was made.
The deal reflects Deutsche Bank’s commitment to the UK investment banking market despite the shift away from dealmaking among global banks. In its statement, the bank said Numis would allow it to deepen its footprint in the UK.