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Investment banks: Dire second half hits 2011 fee income

JPMorgan still top earner; Nomura fee income falls by 34%

The second half of 2011 saw global investment banking fees slump by 30%, according to data published by Thomson Reuters.

Total fees of $81 billion were just 6% down on 2010 – not bad considering – but most of the damage was done in the second half of the year.

Fourth-quarter investment banking fees were $16 billion, a slump of 8% from the third quarter and the slowest three-month period for investment banking fees since the first quarter of 2009.

JPMorgan again topped the fee tables with $5.5 billion in fees, a 2.1% drop from 2010. Bank of America Merrill Lynch holds on to second place with a 1.3% increase in fees to $4.9 billion, with Morgan Stanley leapfrogging Goldman Sachs to the number three spot. The latter suffered an 11.3% slump in fees to $3.9 billion last year, while Morgan Stanley recorded $4.1 billion – a 5.7% fall.

Further down the tables, Wells Fargo recorded a market-defying 17.6% growth in fee income to jump from 14th to 10th, with $1.5 billion fee income. BMO Capital Markets also jumps four places ,from 24th to 20th, with a 20.5% increase in fees to $720 million. The big loser last year, however, was Nomura, which saw its fee income collapse by 34.5% to $909 million, taking it to 16th place.

M&A advisory fees were up slightly on the year – by 1.8% to $30 billion – and accounted for 37% of the global fee pool. Fees from ECM were down 25% year on year, and for DCM down 17.8%.

The former is hardly a surprise, given that global ECM activity slumped 28%, with IPOs down a full 40% for the year. DCM activity was down just 7% in comparison but saw some unprecedented turbulence – for example, having enjoyed a strong first half of the year with issuance of $213.2 billion, the high-yield market collapsed spectacularly with a 70% slump in the second half and limped to a $278.1 billion full-year total.

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No succour from investment bank fee data