Investment banking and the Brexit factor

On the eve of the first anniversary of the UK’s ‘Brexit’ vote on June 23, the impact on UK investment banking (IB) over the past 12 months has been reviewed.

The insights, from the deals intelligence team at media and information group Thomson Reuters, are as follows.

• UK IB fees account for all-time lowest share of global IB fee pool:
Fees generated in the UK account for 5.2% of the total global fee pool so far this year, the lowest annual share since the group began reporting them in 2000. However, 30.9% of 2017 IB fees generated in the UK were earned by UK banks, up from 28.2% in 2016 and the highest annual share since 2005.

• Global IB fees increase 16%
Global investment banking fees total US$45.4bn so far during 2017, up 15% compared to the same period in 2016.
While UK equity capital markets’ underwriting fees have increased 59% year-on-year, and debt capital markets (DCM) and syndicated lending fees have seen double digit increases, advisory fees from completed merger and acquisition (M&A) transactions have declined 34% to the lowest year-to-date level since 2010.

• Fees earned by UK banks increase 17%
UK banks have earned 17% more investment banking fees globally so far this year against the same period a year ago, a combined total of US$3.7bn to date in 2017 from US$3.2billon in 2016.

• UK banks take an 8% share of this year’s global IB fee pool
UK banks have earned a combined 8.2% of the total global IB fee pool so far this year – up from 8.1% in 2016, which was the lowest share since the group’s records began in 2000.

• Fees in Asia increase 41% year-on-year
UK banks have seen a 41% increase in fees in Asia year-to-date, a 16% increase in the Americas, a 16% rise in domestic UK fees, and 11% more in EMEA excluding the UK.

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