Fees at all but one of the world’s 20 largest investment banks tumbled in the first half of 2019, as fewer mergers in Europe and a global slowdown in initial public offerings (IPO) dented corporate pay cheques.
Europe’s investment banks earned a combined $13.3bn (£11bn) worth of fees in the first half of 2019, plunging 14 per cent on the same period in the previous year.
Compared with their US and Asian peers, European banks have failed to see fee growth and recovery post-financial crisis, according to the new research produced by Refinitiv.
Waning activity in Europe’s mergers and acquisitions (M&A) market and a world slowdown in floats from major companies pushed down fee earnings, which declined in the top 19 biggest investment banks.
Chinese group CITIC was the only bank among the top 20 to record a rise in fees.
JP Morgan earned the most in fees in the first six months of 2019, reaping in $3.3bn.
Goldman Sachs followed with $3.1bn and Bank of America Merrill Lynch came in third with $2.5bn.
Credit Suisse was the highest earning European bank on $1.7bn while the highest earning Asian bank was Mizuho Financial Group on $964m.
Since 2009, European banks’ share of the global investment banking fee pool has fallen from 39 per cent to 26 per cent, marking a drop of 13 per cent and the lowest first-half share since our records began in 2000.
“With Brexit looming we’ve seen a decline in M&A...we just haven't seen the activity in Europe that we’ve seen over the last few years,” said Lucille Jones, deals analyst at Refinitiv.
Jones added: “While European banks have seen steady, consistent fee earnings over the past decade, they haven’t seen the fee growth and recovery post-financial crisis that banks in other regions have enjoyed.”