Investment Banking fee slump hits Credit Suisse hard

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Transaction fees from major investment banks fell in the first half of the year. Credit Suisse may have been particularly hard hit.

Transaction fees worldwide fell 38% to $39.4 billion, while revenue in Europe fell by the same percentage to $9.1 billion, Financial News (behind a paywall) reported Wednesday, citing data from data provider Dealogic.

Credit Suisse suffered the biggest decline among major investment banks, down about 56% from the same period last year, the data showed. Switzerland’s second-largest bank has faced several crises and an exodus of traders over the past 12 months and has seen its share of fee income fall from 3.7% to 2.8% during this period.

Burst boom

Even with fees down about 47%, U.S. bank JP Morgan still tops the overall fee generation rankings in the first six months of the year, the data shows. At number two Goldman Sachs, fees were down 46%.

A number of banks broke records for fee generation and new money inflows last year, with investment banks collecting $130 billion in fees in 2021, but recession fears and the interest rate hikes shattered the boom. Mergers and acquisitions are down from last year’s highs, and financing large deals through the leveraged loan market has become much more difficult.

Deal flow has been slowed in recent weeks by rising interest rates, the prospect of a recession and inflationary pressures, he said.

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