360° Coverage : Banks Pocket Healthy Underwriting Fees As Global Equity Market...

2 Updates

Banks Pocket Healthy Underwriting Fees As Global Equity Market Remains Upbeat

Apr 11 2014, 1:54pm CDT | by

The global equity market saw a flurry of activity over the first quarter of the year, with companies around the world raising nearly $190 billion through IPOs and follow-on offerings over the period...

Filed under: news

 
 
 

28 weeks ago

Banks Pocket Healthy Underwriting Fees As Global Equity Market Remains Upbeat

Apr 11 2014, 1:54pm CDT | by

The global equity market saw a flurry of activity over the first quarter of the year, with companies around the world raising nearly $190 billion through IPOs and follow-on offerings over the period. Quarterly data compiled by Thomson Reuters shows that equity underwriting deals were at similar levels to what was witnessed for the same period last year. While the total deal size is almost 30% lower than the $264.4 billion figure for the previous quarter, it must be remembered that the Q4 2013 results were exaggerated by a surge in equity offerings after the Fed’s initial announcements of a tapering plan resulted in a weak Q3 2013 performance.

Continued optimism among companies and investors translated into higher equity underwriting fees for investment banks. Thomson Reuters’ data estimates a 27% jump in equity underwriting fees for the industry as a whole compared to Q1 2013, although a 21% decline is expected sequentially. In this article, we detail the equity capital market performance of the country’s five largest investment banks in Q1 2014, and also estimate the change in each of their fee revenues compared to Q1 and Q4 2013.

See the full Trefis analysis for Goldman Sachs | JPMorgan | Morgan Stanley | Bank of America | Citigroup

The table below summarizes the performance of the equity underwriting unit at each of the five largest U.S. investment banks based on data released by Thomson Reuters last week.

Goldman Sachs retained the top spot in terms of market share by deal size – a position it has maintained in six of the last seven quarters. The bank topped the list of book-runners in EMEA and Asia to achieve a commanding 10.6% share for Q4. Goldman also has a substantially larger average deal size than any of its competitors – indicating that the bank played a role in most of the largest equity underwriting deals over the quarter.

With an 8.4% market share, Morgan Stanley came in second with a total deal size which was 21% lower than Goldman, followed by JPMorgan with a 7.8% market share. In terms of number of deals, JPMorgan ranked highest among all investment banks for the quarter, with the banking group playing a role in more deals (116) than any other bank – a feat it has achieved in six of the last nine quarters.

Notably, Citigroup’s poor equity capital markets run continued for the third consecutive quarter, with the bank garnering just above 5% of the market despite ranking #1 in terms of underwriting deals in the U.S. Consequently, the bank slipped to the 8th position in global standings, with German banking giant Deutsche Bank and Swiss banks Credit Suisse and UBS putting up better numbers.

In terms of equity underwriting fees, Morgan Stanley appears to have topped Goldman by pocketing more revenues than any other investment bank. The last time Morgan Stanley reported the highest fees among all banks was in Q2 2012. As Morgan Stanley has a lower average deal size than Goldman for the period, this would mean that the former played key roles in the underwriting process for many of its deals – allowing it to make more money in the process.

Before we detail the trends in imputed fees as shown in the table above, it should be noted that imputed fees are merely an estimate based on historical data about banks’ fees for a particular role in the equity underwriting process, and the numbers the banks actually report will likely differ from these figures. But these numbers do give a good indication of what to expect. All the banks are expected to earn lower fee revenues in Q1 2014 than what they did in Q4 2013. Compared to the same quarter last year, we expect JPMorgan to earn around 24% more, followed by a healthy 18% boost for Morgan Stanley. While Goldman’s fee revenues should be less than 5% higher, Bank of America and Citigroup will most likely report fees which are 5-10% lower than what they did a year ago.

Bank Deal Size Mkt. Share # Deals Avg. Deal Size Q1’14 Fees Q4’13 Fees Q1’13 Fees
Goldman Sachs $19.9 B 10.6% 93 $214 M $362 M $573 M $351 M
Morgan Stanley $15.8 B 8.4% 97 $163 M $369 M $470 M $311 M
JPMorgan $14.8 B 7.8% 116 $128 M $341 M $434 M $275 M
Bank of America $14.3 B 7.6% 92 $155 M $240 M $418 M $267 M
Citigroup $10.0 B 5.3% 82 $122 M $240 M $313 M $251 M

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

 
Update
2

8 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

8 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double trag ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Hawking joins Facebook, wants people to be 'curious'
New York, Oct 25 (IANS) The famous theoretical physicist professor Stephen Hawking is now on Facebook, asking fans to be "curious".
 
 
NASA captures largest sunspot in two decades
Washington, Oct 25 (IANS) NASA's Solar Dynamics Observatory (SDO) has spotted an image of a gigantic sunspot - the largest in last 24 years.
 
 
Obama hugs nurse who survived Ebola
Washington, Oct 25 (IANS/EFE) US President Barack Obama greeted nurse Nina Pham in the Oval Office with a big hug to celebrate her recovery from the Ebola virus, which she was the first person in the country to contract.
 
 
Microsoft co-founder to donate $100 mn to fight Ebola
New York, Oct 25 (IANS/EFE) US billionaire Paul Allen, one of the founders of Microsoft, will donate $100 million to the fight against the Ebola virus, the daily New York Times said.
 
 
 

Latest from the Network

Second MERS case reported in Qatar
Doha, Oct 23 (IANS) A 43-year-old man in Qatar has tested positive for Middle East Respiratory Syndrome (MERS) in the second confirmed case of the deadly virus in 10 days, media reported Thursday. The patient had...
Read more on Business Balla
 
Two people die in Pakistan bomb blast
Islamabad, Oct 23 (IANS) At least two people were killed and 12 others injured in an explosion that took place in Pakistan's Balochistan province Thursday, media reported. The bomb was planted on a motorcycle, Dawn...
Read more on Politics Balla
 
Trott extends contract with Warwickshire till 2017
London, Oct 23 (IANS) England batsman Jonathan Trott, whose mental issues led to his abrupt departure from last winter's Ashes tour, has confirmed his successful comeback to competitive cricket by signing a new three-...
Read more on Sport Balla
 
Srikanth, Kashyap big movers in BWF rankings
Kuala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest Badminton World Federation (BWF) rankings released Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Alvin Stardust dead
London, Oct 23 (IANS) English singer Alvin Stardust died after a short illness. He was 72. Stardust's manager confirmed the news about his demise Thursday, reports mirror.co.uk. He was recently diagnosed with...
Read more on Celebrity Balla
 
Indian man reunited with family after 40 years
Dubai, Oct 23 (IANS) An Indian man, who had disappeared from his hometown in Kerala nearly 40 years ago, has been found by his family at a hospital in Dubai in the UAE, a newspaper report said. Now in his 60s, Abdulla...
Read more on Politics Balla
 
Srikanth, Kashyap, Saina rise in world rankings
Kala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest released Badminton World Federation (BWF) rankings Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Flintoff signs for Big Bash side Brisbane Heat
Brisbane, Oct 23 (IANS) Former England captain and all-rounder Andrew Flintoff, who retired from international cricket in 2009, Wednesday confirmed that he will play for Brisbane Heat in the Big Bash League (BBL) this...
Read more on Sport Balla
 
OPEC daily basket price falls again
Vienna, Oct 23 (IANS/WAM) The basket of 12 crude oils of the Organization of Petroleum Exporting Countries (OPEC) closed at $81.94 a barrel Wednesday compared to $82.09 Tuesday, the OPEC Secretariat said. The new OPEC...
Read more on Business Balla
 
Lopez to sign multi-million dollar deal?
Los Angeles, Oct 23 (IANS) Singer-actress Jennifer Lopez is reportedly in the final stages of securing a multi-million dollar deal to perform in Las Vegas. The 45-year-old is being offered $350,000 per show at The...
Read more on Celebrity Balla