How Have Debt Origination Deal Volumes For European Investment Banks Changed In The Last 5 Quarters?

by Trefis Team
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After remaining elevated over the first three quarters of 2016, debt origination deal volumes for the five largest European investment banks slumped to just over $200 billion in Q4. This is a sharp reduction from the average quarterly figure of $315 billion over Q1-Q3 2016, and is also 13% lower than the sub-par $235-billion figure from a year ago.

The chart below captures the total size of debt capital market deals completed by the five largest European investment banks since Q4 2015. The green-to-red shading for figures along a row highlight the variations in deal size for a particular bank over this period.


Debt origination volumes for individual banks were taken from Thomson Reuters’ investment banking league tables for the last five quarters. The table below captures the respective market shares for each of these banks over this period. The green-to-yellow shading for figures in a quarter should help compare the relative standings of these 5 banking giants in a particular quarter.


It should be noted that the largest debt capital market deals employ more than one investment bank, so the market share figures are not exclusive.

Notably, the market share for these 5 banks has slid steadily from a high of almost 22% in Q4 2015 to below 14% now. This is primarily because of a faster growth in debt origination activity in emerging markets compared to the U.S. and the EMEA (Europe, Middle East and Africa) region over recent quarters. As the European banks are primarily focused in the EMEA region, and as the market in emerging markets (primarily China) is considerably fragmented with local players having a strong grip on the local industry, this resulted in an overall decline in market share for them.

This, in turn, likely hurt debt underwriting fees for all these banks for Q4 as well as full-year 2016. You can see how a reduction in HSBC’s advisory & underwriting fees impacts our price estimate for the banking giant by modifying the chart below.

See full Trefis analysis for Barclays | Credit Suisse | Deutsche Bank | HSBC | UBS

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