European Union banks just can't catch a
break.
Many of them are still slogging uphill to
recoup share price losses incurred from the Brexit vote in the U.K. European
investment banking revenue overall is down 23 percent this year compared with
the same period in 2015, according to data tracker Dealogic. And all are
lagging behind U.S. banks for wallet share, or how much revenue they take in
from dealmaking compared to competitors.
JPMorgan Chase tops every bank in the EU for wallet
share, with 7.3 percent of deals, according to data from Dealogic this week.
It's followed by Goldman Sachs, which
has 6.2 percent of deals, and only then, in third place, is an EU bank: Deutsche Bank has
5 percent of revenue on European mergers and acquisitions. But European banks
(and their American counterparts) are fighting off a rising tide ofboutique banks that have taken a growing percentage of
M&A revenue from them over the last decade
Around the world, M&A levels have
declined from recent record highs. But the pain is exacerbated in
Europe, where big banks experienced a steeper drop off in revenue.
Dealogic data show that investment
banking in Germany, for example, is down 45 percent. Globally, European deals
account for just 22 percent of banking revenue, the lowest margin since Dealogic
began tracking investment banking wallet share.
That comes in the wake of banks being hit
especially hard on concerns about elevated loan losses, especially those coming
from oil and gas assets.
But there is one small silver lining for
EU banks. The European Central Bank's decision to ramp up bond buying means
Europe's banks may find themselves working on more debt deals that juice their
top line. So even if EU banks are stuck fighting off their American
counterparts for M&A deals, they have another lever to pull to generate
more cash.
Correction: European investment banking
revenue overall is down this year compared with the same period in 2015. An
earlier version misstated the time frame.
Source: CNBC