How Have Total M&A Deals Closed By Major European Investment Banks Trended In The Last 5 Quarters?

by Trefis Team
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Strong recovery in the volume of M&A deals completed for Q4 2016 did not benefit deal volumes for all the major European investment banks for the quarter. While Barclays and Deutsche Bank made the most of the increased activity levels to report a sequential improvement in deal size, both the Swiss banks UBS and Credit Suisse reported sub-par deal volumes.

The chart below captures the total size of M&A deals completed by the four largest European investment banks since Q4 2015. The green-to-red shading for figures along a row show the variations in deal size for a particular bank over this period.

IB_QA_EU_MnA_Comp_SizeChange_16Q4

M&A advisory deal volumes for individual banks were taken from Thomson Reuters’ latest investment banking league tables. Notably, Q3 2016 was the best quarter for these four banks in terms of average market share since the economic downturn of 2008, and the figure fell to below 15% in Q4. The table below captures the respective market shares for each of these banks over the last five quarters. The green-to-yellow shading for figures in a column should help compare the relative standings of these 4 banking giants in a particular quarter.

IB_QA_EU_MnA_Comp_ShareChange_16Q4

It should be noted that the largest M&A deals employ many investment banks, so the market size and share figures shown here are not exclusive.

UBS stands out among these banks with an average quarterly market share of less than 8% over the last two years compared to a figure between 13-15% for the other three banks. This is because the largest Swiss bank has a relatively risk-averse approach and does not finance M&A deals on which it advises – weighing on its market share. The uptick in market share for Q3 2016 was because of UBS’s role in closing the £24.3-billion acquisition of ARM Holdings by SoftBank. [1]

You can see how changes to UBS’s share of completed M&A deals globally affect our estimate for the bank’s share price by modifying the chart below.

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

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Notes:
  1. SoftBank Offers to Acquire ARM Holdings for GBP 24.3 Billion (USD 31.4 Billion) in Cash, BusinessWire, Jul 18 2016 []
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