A surge in blank-cheque investment vehicle fundraising and frantic pandemic-related trading in 2020 boosted investment banks' income by a record 28per cent from the year before, a report showed on Friday.
Revenues for the 12 largest investment banks tracked in research firm Coalition Greenwich's index rose to US$194 billion, the highest annual total for the industry since the survey began around a decade ago.The trading bonanza showed how Wall Street and European banks benefited as the COVID-19 pandemic sparked global government and central bank action, upending asset prices and sending investors scrambling for safe havens.
Just one part of a listings boom which also included more traditional initial public offerings , SPACs raised a record US$82 billion last year and the trend has been gathering steam in 2021, boosting fee income for banks organising the deals. In equities, derivatives volumes hit their highest level in a decade, Coalition said, but again more complex structured products underperformed as companies axing dividends in the first half of the year hit derivatives tied to such payouts.Despite the bumper year, frontline revenue-producing bankers faced job losses, Coalition said, with positions down 1per cent from a year earlier to 48,700 as banks cut structured equity derivatives jobs in particular on waning demand.
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