01/04/2012 12:08 pm ET Updated Dec 06, 2017

Investment Banking Fees 2011: Investment Banking Fees Hit Three-Year Low

LONDON, Jan 4 (Reuters) - Global investment banking fees hit their lowest level for three years in 2011, costing $5 billion in lost income compared with 2010, as dealmaking collapsed, stoking fierce competition for the trickle of remaining appointments.

Concerns about Europe's sovereign debt crisis rocked markets in the second half, reversing a promising start to the year and sending global fees down 6 percent year-on-year to $81 billion, according to ThomsonReuters data.

Top firms including Goldman Sachs lost ground as companies issued fewer bonds, halted stock listings and sat on cash even though they might have been able to get a better return on their money through acquisitions.

Fees collected by Goldman declined by more than 11 percent as it slid to fourth place in the global rankings, and its market share fell 0.3 percent. It was overtaken by archrival Morgan Stanley.

JPMorgan maintained its position as top fee earner, though it also saw its haul shrink 2.1 percent from 2010.

Of the top five banks -- all U.S. firms -- only Bank of America Merrill Lynch, in second place, brought in more fees than the previous year.

Japanese group Nomura experienced the biggest fall in fees of all banks in the top 25 listing, tumbling 34.5 percent. Its loss of 0.5 percentage points of market share was also the biggest of the top banks'.

Global equities capital markets took the hardest hit last year, with activity falling 28 percent and with the fourth quarter featuring as the slowest three months for two years.

Debt capital markets issues fell 7 percent, while mergers and acquisitions, measured by deal value, rose 7 percent on the back of a strong performance in the first six months.

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 lay-offs were announced this year, a Reuters tally shows.

Even in outperforming areas such as mergers and acquisitions, bankers worry that this year could deteriorate further if European policymakers fail to restore confidence.

Many fear continued weakness in the region could spread globally and eventually undermine the healthier M&A markets in the United States and Asia.

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