Australian investment banking revenues suffer steep fall

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Australian investment banking revenues suffer steep fall

The Australian investment banking sector generated US$1.4bn in the first three quarters of 2019, representing a drop of more than 27% YoY, according to new data.

According to research by Refiitiv, merger and acquisitions advisory fees were 21.6% lower than in 2018, reaching $358.8m in revenues.

Initial public offerings by Australian companies raised $416.1m, a 90.1% decline on 2018, and the lowest first nine months period for Australian IPOs since 2012.

Australian equity capital markets (ECM) raised $13.1bn so far this year, a 38.8% decrease in total proceeds from the comparable period in 2018. 

And M&A activity within Australia reached $83.8bn in the first three quarters of 2019, or a 21.1% fall on 2018. Overall M&A activity in the country reached its lowest level since 2013.

Underwriting fees for equity capital markets also declined by 24.1% on the year to September, totalling $369.4m. And debt capital markets (DCM) underwriting fees dropped by 21% to $345.9m, a three-year low.

The declines in investment banking revenues come against a backdrop of widespread reform in the Australian financial services industry following a string of scandals that hit the "big four" banks particularly hard. 

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Christopher Copper-Ind

Christopher Copper-Ind is editor-in-chief of International Investment. Before this, he was editorial director of The Business Year, from 2014 to 2017.