Europe's shrunken banks lose grip on deal fees
LONDON, April 10 |
LONDON, April 10 (Reuters) - Banks making deep cuts to balance sheets, like French lenders, slipped behind rivals in their share of shrinking global investment banking fees in the first quarter, according to Thomson Reuters data.
In a sign of the upheaval gripping the industry, even top banks like JPMorgan, the top fee earner, gave up market share in a weak three months for mergers and acquisitions and stock listings.
Overall global investment banking fees shrank to $17.6 billion for the quarter, down 14.4 percent on a year ago.
Banks slashing risky assets most aggressively - largely European banks grappling with stricter capital rules and the fallout from the euro zone debt crisis - were among those losing the most ground, the data showed.
BNP Paribas, which ranked as a top 10 firm by global investment bank fees in the first quarter last year, fell four places as its fee income shrank over 26 percent.
Credit Agricole, which is axing more than 2,000 jobs at its investment bank and pulling out of some lending and trading activities, fell the furthest, tumbling six places to 25th.
Societe Generale dropped behind specialist investment bank Lazard and Canada's TD Securities.
Banks are retreating from some lending businesses but in the process have surrendered funding relationships which can help generate fees for other types of transactions, like M&A deals.
Investment banks have been trying to juggle these dynamics to hit on a viable business model under tighter regulations, a scenario that could radically alter the hierarchy among rival firms.
Cyclical pressures has added to problems but a pick-up in dealmaking could help firms make up lost ground later in the year.
Some firms fell behind even though they are not cutting quite so aggressively.
Fees at Britain's Barclays slid over 30 percent, the steepest drop among all top 25 investment banks. But it stayed among the top 10 players.
U.S. banks retain a firm grip on the top five investment banking fees spots globally, and income from deals in the Americas fell less dramatically than in Europe, the Middle East and Africa, where fees tumbled over 20 percent from a year ago.
But powerhouse Goldman Sachs lost ground, while Citi , one of the U.S. banks worst hit in the 2008 financial crisis, was the only U.S. top five firm to gain market share in the first quarter of 2012.
NEWCOMERS GAIN GROUND
While the biggest banks shed market share in a lacklustre first quarter - in which a pick-up in bond deals was a rare bright spot - those grabbing it included firms that hired while others cut last year.
Banks with roots in commodities-rich countries like Canada have done well in regions like Europe, where they have been targeting their hiring sprees as they look to win business from ailing local lenders.
As well as Canada's TD, which pushed into the top 25, peer RBC Capital Markets lifted global investment bank fees by nearly 60 percent as it closed in on a top 10 ranking.
Japanese banks such as Mitsubishi UFJ Financial Group also benefited from a European retreat.
However Japan's Nomura gave up market share. It has expanded in Europe and the United States more aggressively than its domestic peers, and rising costs have forced it to cut back.
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