Europe’s dealmakers begin tough redemption journey
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Liam Proud
LONDON, Aug 19 (Reuters Breakingviews) -Dealmakers at big European investment banks may finally have stopped losing market share. The next task is to keep growing – and convince shareholders to care.
Recent years have been rough for the collective market share of Barclays BARC.L, BNP Paribas BNPP.PA, Deutsche Bank DBKGn.DE, Société Générale SOGN.PA and UBS UBSG.S. Squeezed on one side by U.S. behemoths like Goldman Sachs GS.N, and by boutiques like Centerview Partners on the other, the quintet’s collective haul of global M&A fees was just 8.3% in 2023, according to Dealogic, compared with 12.2% in 2019. Over the same period, the European banks’ share of worldwide equity underwriting fees almost halved to 5.7%.
The tide may be turning. So far in 2024, Dealogic data shows that the five lenders’ share of M&A fees has risen by 0.2 percentage points to 8.5%. That’s not much, but it would be the first increase in years, and compares with an average annual decline of about 1 percentage point between 2019 and 2023. In equity underwriting, the group’s share leapt by 1.4 percentage points to 7.1%, led by a strong performance from Barclays.
It may, of course, be a blip. But the optimistic case is that Europeans have been recruiting new rainmakers and bulking up their offerings. Deutsche, for example, bought UK-focused adviser Numis and hired Alison Harding-Jones, Citigroup’s former head of M&A for Europe, the Middle East and Africa. Barclays last year overhauled the leadership of its investment bank by bringing in Cathal Deasy, formerly global head of M&A at Credit Suisse, and has added a raft of new senior talent since then. UBS, meanwhile, has swelled its ranks through the acquisition of its local rival.
The forward indicators are encouraging, too. LSEG tracks the volume of announced deals, indicating where fees might go in the future. The five banks on average saw an M&A market-share increase of 2.1 percentage points so far in 2024. That was helped by BNP’s role advising Brookfield Asset Management on its planned $7 billion purchase of French solar and wind specialist Neoen, and Barclays’ place on Silver Lake’s $13 billion take-private of media mogul Ari Emanuel’s Endeavor.
The wrinkle is that shareholders have historically taken a relatively dim view of the advisory and underwriting businesses. That’s because their earnings are volatile and, in the case of leveraged-finance underwriting, prone to occasional losses. One way to change that perception would be to prove that CEO-whisperers can serve the wider bank too. At UBS, that might include landing more wealth-management business off the back of M&A advice. Deutsche’s rainmakers, meanwhile, could help the corporate bank win more clients for steadier earners like treasury services. That would help turn a league-table win into shareholder value.
Follow @Breakingviews on X
CONTEXT NEWS
Barclays, BNP Paribas, Deutsche Bank, Société Générale and UBS collectively generated 8.5% of total investment-banking revenue from global mergers and acquisitions so far this year, according to Dealogic data. That compared with an 8.3% fee share in the full year of 2023.
For the equity capital markets business, which includes underwriting initial public offerings and other share sales, the equivalent fee share rose to 7.1% so far in 2024 compared with 5.7% in 2023.
Graphic: Market-share trough for Europe’s big investment banks? https://reut.rs/3YFXi7U
Editing by Francesco Guerrera and Oliver Taslic
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
