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Crunch bites into banks' fees
Nick Goodway30.06.08
Investment banks' fee income dropped by more than one-third in the first half of this year as the credit crunch saw deals and flotations dry up.
Among the worst hit were Barclays Capital, Citigroup and Deutsche Bank, which saw their market share fall and their fee income slashed, according to data from Dealogic.
The firm estimates that total investment banking fees income across Europe dropped 35% to $11.6 billion (£5.8 billion). The worst area was syndicated loans where fee income tumbled by 59%.
Globally the fee pool fell by 36% to $31.3 billion. Within that, Deutsche's fees fell 49.8% to $1.3 billion, Citigroup's 45% and Barclays Capital 49%.
Of the winners, Merrill Lynch's fees rose almost 10% and Royal Bank of Scotland's were up 13% - due to its takeover of ABN Amro.
The declining fees make grim reading for bankers, although senior managers reckon the outlook is not all bad.
Merrill Lynch head of European M&A Carlo Calabria said the market was experiencing a "mild ice age" but remained optimistic.
"Chief executives at companies with strong balance sheets see there exists an opportunity at the moment to strike a deal," he said.
