What Was The Share Of Major European Investment Banks In The Equity Underwriting Industry For Q3?
The four largest European investment banks saw equity underwriting volumes for Q3 shrink sharply as companies in the EMEA (Europe, Middle East and Africa) region shied away from new equity offerings in the wake of the Brexit vote. [1] Total equity underwriting deal volumes in EMEA fell from almost $60 billion in Q2 to $37 billion in Q3 2016 – a reduction of more than 35% quarter-on-quarter. As this is the key operating region for these banks, this in turn resulted in their global market share falling from 20% to below 14% over this period.
Equity underwriting volumes for individual banks were taken from Thomson Reuters’ latest investment banking league tables. It should be noted that the largest equity capital market deals (IPOs and FPOs) employ more than one investment bank, so the market share figures are not exclusive.
Deutsche Bank lost the top spot to Credit Suisse in Q3. The German banking giant, which is currently a source for concern among investors for its weak capital condition, has seen its brand image suffer over recent months. If the bank does not take concrete steps to shore up its balance sheet in the near future, then it could lose more of its equity underwriting market share over coming quarters. You can see how changes in Deutsche Bank’s share of the equity underwriting industry impact our price estimate for the bank’s shares by making changes to the chart below.
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- Global Equity Capital Markets Q3 2016, Thomson Reuters Deals Intelligence [↩]