Global investment banking revenue drops to lowest since 2012
Surge in outbound deals bolsters revenue generated from China market, says Dealogic report
Global investment banking revenue declined for the second consecutive year in 2016 and fell to the lowest level since 2012, while revenue generated from the China market hit a record on the back of a flurry of outbound merger and acquisition (M&A) deals, data from Dealogic shows.
Global investment banking revenue declined 4 per cent to US$74.3 billion (HK$576.42 billion) in 2016, the lowest level after 2012’s US$69.1 billion.
On the other hand, Asia-Pacific investment banking revenue hit a record breaking US$16.2 billion in 2016, surpassing the previous high of US$15.9 billion in 2010. revenue from China soared to US$8.9 billion, thanks to the continued offshore buying spree by Chinese companies, while Japan revenue at US$2.8 billion was the lowest in eight years since it reached US$2.7 billion in 2008.
The decline in global investment banking revenue was driven by equity markets, which went down 25 per cent from 2015 to US$14 billion, marking the second lowest annual total since 2003, behind 2012. Merger and acquisition revenue remained on par with 2015, whilst revenue from debt markets and loans increased 7 per cent and 5 per cent, respectively.
European investment banking revenue stood at US$16.2 billion in 2016, the second lowest level in 13 years in 2016, behind US$16.1 billion in 2012. While UK investment banking revenue fell 6 per cent year‐on‐year to US$4 billion, it accounted for a 25 per cent share of European investment banking, the highest share since the financial crisis.