With just a couple of days to go before the banks start to announce their performance figures for the first quarter, data released by Thomson Reuters as part of its quarterly M&A league tables gives a rather clear picture of how the global environment was for the investment banks offering advisory services the last three months.
The banks completed M&A deals worth a total of $489 billion in Q1 2013, and although this figure is a good 18% higher than $371 billion in deals closed in Q1 2012, it falls below Q4 2012 tally of $667 billion by almost 30%.  And it must be kept in mind that Q1 2012 figures were exceptionally low as a result of weak economic conditions in Europe during the second half of 2011, which kept companies away from entering into new deals during the period.
Also, 8,100 deals were announced globally for the quarter, making it the slowest quarter in terms of the number of announced deals since Q3 2004. It was only due to a notable increase in the number of super-sized deals (larger than $5 billion) in Q1 2013 compared to Q1 2012 that the total announced deal size was 10% higher between these two quarters. The large deal sizes also helped the biggest banks take home more as fee revenues, with most of the banks ranked in the top 10 recording an at least 10% increase in imputed fees.
- How Have Total M&A Deals Closed By Major European Investment Banks Trended In The Last 5 Quarters?
- What Was The Share Of Major European Investment Banks In The Global M&A Industry For Q4?
- How Have Debt Origination Deal Volumes For European Investment Banks Changed In The Last 5 Quarters?
- How Have Equity Underwriting Deals Closed By European Investment Banks Trended In The Last 5 Quarters?
- What Was The Share Of Major European Investment Banks In Global Debt Origination For Q4 and FY 2016?
- A Look At The Equity Underwriting Market Shares Of European Investment Banks In Q4
As mentioned above, the total size of M&A deals completed in the first quarter of the year was $489 billion. U.S. banks garnered the lion’s share of this figure with four of the top-five banks on the list being U.S. banking giants. The only non-U.S. bank figuring in the list was Barclays (NYSE:BCS).
The table below summarizes the performance of the M&A unit at each of the top six banks according to Thomson Reuters’ data. Do note that most deals employ more than one bank, which is why the sum of market shares is well over 100%.
|Bank||Rank||Deal Size||Mkt. Share||# Deals||Avg. Deal Size||Q1’13 Imputed Fees||Q1’12 Imputed Fees|
|Morgan Stanley||1||$192.6 B||39.40%||63||$3.06 B||$322 M||$303 M|
|Barclays||2||$160.6 B||32.90%||37||$4.34 B||$185 M||$133 M|
|Goldman Sachs||3||$141.5 B||28.90%||64||$2.21 B||$361 M||$280 M|
|Citigroup||4||$124.5 B||25.50%||40||$3.11 B||$185 M||$102 M|
|Bank of America||5||$116.1 B||23.70%||48||$2.42 B||$215 M||$195 M|
|JPMorgan||6||$82.2 B||16.80%||40||$2.06 B||$229 M||$205 M|
Morgan Stanley (NYSE:MS) leads the pack when it comes to M&A advisory for the quarter, followed by Barclays. Quite notably, Goldman Sachs (NYSE:GS) slipped to third spot in terms of market share, but the global investment bank played a part in more deals (64) than any other bank for the period.
An interesting observation here is that the average deal size for Barclays, at $4.3 billion, is higher than that for the others, which means that the bank was part of the biggest deals that were completed over the period.
Coming to the most important aspect as far as the banks are concerned – the revenue they collected as fees from these deals – Goldman emerges on top with imputed fees of $361 million. It must be noted here that imputed fees are merely an estimate based on historical data about fees demanded by the banks for a particular role in the complex M&A advisory process, and the numbers the banks actually report would differ from these figures.
But these numbers do give a good indication of what to expect. As is evident from the comparison of fees for the first quarter of 2012 and 2013, all these banks will most likely report a notably higher M&A revenue for Q1.Notes: