Amid robust capital markets activity and an increase in mergers and acquisitions (M&A), global investment banking fees surged to their highest level in three years, according to new data from LSEG Data & Analytics.
The global fee pool swelled to an estimated US$117.4 billion last year, the firm reported — an increase of 14% from the previous year — as most of the major segments of investment banking saw fees rise.
Debt underwriting led the way, with estimated fees up 24% year over year to US$39.3 billion. M&A fees climbed 7% to US$33.4 billion, and syndicated lending was up 15% to US$29 billion.
Fees from equity underwriting also rose 7% year over year, as increases in secondary offerings and convertible bond offerings overcame a 14% drop in initial public offering (IPO) fees.
In a separate report, LSEG noted that global debt markets saw new issue activity jump 20% in 2024 to a record US$10.7 trillion, as deal volume climbed 15% from the previous year to set a record there too.
The strength in global debt markets was underpinned by a 19% increase in investment grade corporate debt offerings to a record US$5.1 trillion. The issuance of global high yield debt also surged 82% in the year to US$401.3 billion, which represented a three-year high, LSEG said.
For 2024, global equity capital markets activity was up 19% from the previous year, the firm also noted, with US$637.9 billion worth of new issuance — despite a 1% year-over-year decline in deal volume.
Secondary equity offerings were up 26% in 2024, and convertible bond offerings rose 19%, offsetting weakness in the IPO markets. The value of IPOs from China dropped 71% year over year to a 20-year low.
The U.S. IPO market rebounded, however, with total proceeds jumping 54% from the previous year, LSEG noted.
North America leads
By geography, North America led the rise in global investment banking fees, accounting for over half of the global total (US$61.7 billion), up 24% from the previous year.
Fees were also up 19% year over year in the Europe, Middle East and Africa (EMEA) region, and rose 7% in Japan, offsetting an 11% decline in the Asia-Pacific region (ex. Japan).
By sector, the financial industry was far and away the largest source of global fees, accounting for 35% of the total — up 23% from a year ago.
The industrials sector ranked a distant second with a 10.6% share, and the energy and power sector was a close third at 10.2%.
LSEG reported that JP Morgan continued to top the global league tables, as it increased its share of total fees by 0.8 percentage points to an estimated 7.9% share of global fees.
Goldman Sachs ranked second with 6.1% of global share, up 0.4 points from a year ago. BofA Securities took third spot. Morgan Stanley and Citi rounded out the top five.
Among Canadian firms, RBC Capital Markets ranked highest in 11th place, down one spot from 2023, while TD Securities rose two places to 16th and BMO Capital Markets held steady at 19th.