Aussie investment banking fees down 33%

Australian investment bankers have been doing it tough, according to the latest data, with investment banking fees down 33% for the first quarter compared to the same period last year.

The latest Australian Investment Banking Review conducted by UK-based London Stock Exchange Group (LSEG) Data & Analytics said an estimated US$342.2 million worth of investment banking fees have been earned in Australia so far this year.

It said ECM underwriting fees accounted for 17% of the Australian investment banking fee pool that totalled $142.9 million so far this year, down 2% compared to the first quarter last year, while completed mergers and acquisition (M&A) advisor fees amounted to US$94.6 million, down 50% from a year ago.

The analysis said syndicated lending fees reached US$45.7 million down 36% from the first quarter of 2023.

Dealing with mergers acquisitions, it said Australian involvement in announced M&A activity amounted to US$20.7 billion – 42.6% lower in value compared to the first quarter of 2023, “making it the lowest first quarter total since 2020 (US$13.1 billion)”.

“Target Australia M&A reached US$18.3 billion, down 39% compared to first quarter of 2023,” it said.

“Domestic M&A activity grew 60% from a year ago and stood at US$5.5 billion. Inbound M&A activity reached US$12.8 billion so far this year, 52.0% lower compared to the first quarter of 2023. Outbound M&A fell 15.7% compared to last year with US$2.2 billion worth of deals.”

Dealing with Equity Capital Markets it said Australia equity capital markets (ECM) raised US$2.1 billion so far this year, a 49.8% decline in proceeds compared to first quarter of 2023. Australia-domiciled companies raised US$2.08 billion via follow-on offerings, down 47.1% compared to the start of the previous year. Only one IPO from an Australian issuer has priced so far this year after Litchfield Minerals launched its US$3.25 million (AU$5 billion) IPO in ASX.

“Australian issuers from the Materials sector accounted for 60.6% of the ECM market share and amounted to US$1.3 billion so far, down 14.6% in proceeds compared to last year. Consumer Staples followed with 9.6% market share, a significant increase compared to the US$10.95 million raised in the first quarter of 2023. High Technology rounded out the top three with 7.6% market share.”

“Based on preliminary data, Barclays leads the Australia ECM underwriting with US$472.98 billion in related proceeds and 22.7% market share so far this year.

On Debt Capital Markets the analysis said primary bond offerings from Australia-domiciled issuers raised US$43.0 billion so far this year, almost unchanged compared to the first quarter of 2023.

“Australian companies from the Financials sector captured 69.5% market share, raising US$29.9 billion, slightly lower by 0.3% compared to first quarter of last year. Government & Agencies accounted for 21.6% market share and totaled US$9.3 billion in proceeds, up 12.7% from the first quarter of last year. Telecommunications accounted for 5.1% market share, raising US$2.2 billion, a 16.7% increase in proceeds from a year ago.”

“Based on preliminary data, Westpac Banking takes the lead in the Australian bonds underwriting league table with US$6.9 billion in related proceeds, capturing 16.1% market share.”