Q3 investment banking fees slump 30 pct to lowest in 4 years

By Jamie McGeever

LONDON, Oct (HKSE: 3366-OL.HK - news) 2 (Reuters) - Investment banking fees slumped in the third quarter, with the volatility that swept through global financial markets resulting in the slowest three months for fees in almost four years, according to figures published by Thomson Reuters on Friday.

Global fees for services ranging from merger and acquisitions advisory to capital markets underwriting totaled $17.4 billion, down 30 percent from the previous quarter and the lowest since the last three months of 2011.

The third quarter was a torrid time for global markets. Only two out of 21 financial benchmarks tracked by Reuters rose in the period, making it highly likely that 2015 will be the worst year for investors since the credit bust and banking collapse of 2008.

The fall in investment banking fees was driven by a 55 percent plunge in equity capital market income from the second quarter, while debt capital market fees fell by a third.

Investment banking fees over the first nine months of the year stood at $64.5 billion, down 10 percent from the same period last year and the lowest since 2013, the data showed.

Led by a 30 percent decline in initial public offering (IPO) fees, total equity underwriting income in the first nine months of the year fell to $16 billion, and for debt underwriting it dropped 15 percent to $16.8 billion.

On the other hand, M&A advisory fees rose 8 percent to $18.6 billion in the first nine months. Despite the stock market plunge and more expensive debt financing, global M&A exceeded $1 trillion in the third quarter, the third highest on record.

JP Morgan topped the global league table, drawing in $4.66 billion in fees during the first nine months of the year, or 7.2 percent of the overall wallet share. Goldman Sachs (NYSE: GS-PB - news) was a close second with $4.65 billion.

U.S (Other OTC: UBGXF - news) . investment banks consolidated their position as the most powerful in the industry. The top five were all U.S. banks, with 31 percent of the total, and of the top 25 banks not one U.S. bank saw its share decline, the report showed. (Reporting by Jamie McGeever; Editing by Mark Heinrich)