Investment banking: Banks must settle for a smaller slice of the pie

Those investment banks that have suffered sharply lower second-quarter trading results must be hoping that the mergers and acquisitions business continues to improve. There’s nothing like some good fee income to steady a firm’s earnings. M&A volumes are slightly up on last year, but it’s not quite the lucrative business it used to be. In a research note at the end of May, Michael Hecht, brokerage analyst at Banc of America Securities, quantified what many had already suspected: there are now more banks involved as advisers on deals than in the past.