LONDON Europe's debt woes dragged worldwide investment banking income down this year, data showed, with fees on the continent slumping to the lowest quarterly level ever recorded and company listings and acquisitions grinding to a near halt.
The number of bond deals across the world fell in the fourth quarter to levels not seen since after the collapse of Lehman Brothers in 2008, according to Thomson Reuters and Freeman Consulting data.
In Europe, fees raised since October from bonds, flotations and mergers and acquisitions stand at the lowest level ever recorded by the data providers.
A stronger start to the year in areas such as mergers and acquisitions fizzled out, leaving investment banks' overall haul of fees at $72.6 billion -- down 8 percent on 2010..
Germany's Deutsche Bank DBKG.n claimed the top fee spot in Europe, relegating JPMorgan (JPM.N) to second place -- even if the U.S. firm is still first by fees globally.
JPMorgan lost ground in European equity capital markets (ECM), the business that arranges listings and rights issues, in part after missing out on commodities firm Glencore's $10 billion flotation, one of the biggest of the year.
Since that listing in May, however, ECM activity in Europe tailed off dramatically, leaving little but a trail of postponed or cancelled deals as market turmoil intensified.
"We had a roaring start in 2011 and then it just died," said Craig Coben, head of EMEA ECM at Bank of America Merrill Lynch in London. "September, October and November have probably been some of the worst periods we have ever experienced in new equity issuance in Europe."
BofA ML ranked third globally and seventh in Europe by ECM fees so far this year, according to the data, which ran up to December20.
Few are confident that 2012 will dramatically pick up, at least first thing in January, which usually ushers in the best quarter of the year for banks as companies rush to raise funding - the January "halo effect," as one banker described it.
For that to happen, policymakers in Europe would have to have allayed investors fears over a Greek debt bailout and the broader euro zone debt crisis.
Investors have until now stayed on the sidelines, shying away from equity and debt deals.
This year's faltering deal volumes and tumbling fees have already prompted investment banks in Europe, the United States and Asia to slash costs and headcount.
Close to 130,000 major lay-off plans were announced this year, a Reuters tally shows.
Advisory fees in Asia Pacific held up better than in Europe in the fourth quarter, bolstered by a rush of flotations, although across the whole year they still stand around $5 billion below income reaped by advisers in EMEA.
This came in at $18.2 billion. The U.S. investment banking fee pool remains the biggest, at $31.6 billion.
Switzerland's UBS UBSN.VX, which was hit this year by a rogue trading scandal, kept its grip on the Asian market as the top adviser by fees.
In the United States, JPMorgan was the top bank by investment banking fees, pushing rival BofA ML to second place.
(Additional reporting by Kylie Maclellan; Editing by Greg Mahlich)