Investment banking fees just broke the upper watermark that was last set before the last financial crisis. The fees collected by the investment banking industry so far this year exceed $76 billion, based on new reports from The Financial Times. The industry at large produced strong fee growth with some exceptional All-American performances from the top five firms.
The period-over-period growth in the total fees collected was over 14 percent, a new ten-year high for the IB market. Recent success in the industry is largely attributed to strong capital market growth and stellar performances from a few of the world’s best-known investment banking houses. The revenue was a 50-50 split between the Americas and the rest of the globe.
JP Morgan led the pack with nearly $5 billion in fees collected so far in 2017. Goldman Sachs and Bank of America Merrill Lynch rounded out the top three with $4.2 billion and $4.1 billion earned, respectively. The top European performers were Barclays, Credit Suisse, and Deutsche Bank, marking yet another shutout for Old World firms in the ranks of the top five performers.
American firms continue to dominate the top five investment banks on the global stage. Citi Bank won the honors of the strongest growth in 2017 (28 percent) as well as the distinction of fourth place in the top ten, earning revenue in excess of $3.7 billion so far this year.
The FT League Tables offer some insight into the fee breakdown by industrial sector. Financials led the pack, paying nearly $1.4 billion in fees to the investment banking industry so far this year. In second place, Energy firms spent $550 million for investment banking services since January 1st. Healthcare, High Technology, and Industrials rounded out the rest of the top five.
Fee growth by industry highlighted the persistent challenges of the High Technology market. Overall fee growth in 2017 is negative for the year, a standout bad performance for technology deal-making in an otherwise-growing market across all other industries.
U.S. banks collected the most fees in the Americas, the United States, the United Kingdom, and Europe. Regional banks in many countries managed to eke out a win against their big global competitors. Japan’s Mizuho Financial Group out-earned their international rivals for top place in Japan. In Brazil, Banco Bradesco SA collected $89 million in fees to win first place in their home country.
Japan posted the strongest growth compared to other markets with a record-high $4.1 billion in fees collected. Thompson Reuters only began tracking the Japanese market in the year 2000, so the island nation has now set a 17-year record for investment banking activity. European investment banking houses also showed growth in fees collected. The African and Central Asian market was the only region tracked in the survey with negative growth in fee generation.
China’s state-owned investment bank won top fee-collecting honors at home and throughout Central Asia and Asia Pacific. While fee growth for the combined regions was under the global average in 2017 to date, there was impressive fee growth from Financials and Government/Agencies clients. Industrials and Real Estate remain weak with negative growth year-to-date.