A service of

Revenue report October 2022: Fees from fixed income slide

Fixed-income bankers have taken some hits in 2022.

In tandem with a sharp fall in fixed-income volumes, combined revenue across both bonds and syndicated loans slumped to a 12-year low in the Americas, a 20-year trough in EMEA, and a seven-year low in Asia-Pacific between 1 January and 31 October. As issuance has dried up, so has revenue, with investment bankers earning a total of USD 26bn, 43% down on the same period last year. The big beasts, JPMorgan and BofA Securities, which have historically led on fees generated for both products, continue to dominate.

On the bonds front, revenue dived 43% to USD 16bn, marking a record low. Only JPMorgan and BofA Securities netted more than USD 1bn in fees from bonds, while Citi, Morgan Stanley, Goldman Sachs and Barclays all generated income of more than USD 500m.

At USD 10bn, fees from loans were only marginally higher than the same period in 2020, when the pandemic hit hard, and revenue dried up to USD 8.5bn. On the loans front, only JPMorgan and BofA Securities had more than USD 500m in fees, followed by Barclays, Goldman Sachs and Wells Fargo Securities.

Americas: fixed-income fees dwindle to 12-year low

Corporate bond fees in the Americas, which make up about 71% of fees from debt capital markets (DCM), fell in line with bond volumes, between 1 January and 31 October. Given the higher interest-rate environment, lower risk appetite, and volatile geopolitical outlook, fees from investment-grade (IG) bonds were down only 15% compared with 80% for high-yield (HY) notes. Loans told a similar story, with fees sliding 18% for IG and 45% for non-IG loans.

Across both products, fees from financial institutions, which led the charge, reached USD 4.4bn, followed by technology with USD 2bn. Industrials and energy & natural resources each generated more than USD 1.5bn in fees, while consumer & retail raised about USD 1.3bn. The top-10 fixed-income bankers by fees as of 31 October were the same, albeit in a different order, as they were in the same period last year.

Only two bankers in the top 10 – JPMorgan and BofA Securities – picked up more than USD 1bn each for fixed-income revenue unlike all top-10 players last year. Wells Fargo Securities saw the lowest revenue decline year-on-year (YoY), which saw it jump four spots to third place.

EMEA: fixed-income fees slump to 20-year low

In EMEA, fees from bonds and loans tanked 45% to around USD 6bn between 1 January and 31 October, marking a 20-year low. Bonds mirrored the 20-year trend, plummeting 42% from last year to almost USD 4bn, while loans shed 49% to USD 2bn, marking a six-year low.

Fees from corporate bonds generated some 55% of all bond fees. As was the case in the Americas, EMEA fees from HY bonds and loans fell considerably more than their IG counterparts. Fees from HY issuance collapsed an average of 68%, while IG was down only 31% compared with the same period last year.

JPMorgan and BNP Paribas, as they have since 31 October 2019, headed fixed-income revenue league tables, picking up marginally less than USD 500m and USD 400m, respectively. They were followed by Barclays, Goldman Sachs, BofA Securities and Citi. Fee-payers based in four European countries – the UK, Germany, France and the Netherlands – brought in more than USD 500m in fees from fixed income in as at 31 October 2022, compared with seven countries last year. Despite the dominance of American majors in EMEA fee rankings, locally-headquartered bankers cleaned up on fees in their respective countries: Barclays in the UK, Deutsche Bank in Germany, BNP Paribas in France, and ING in the Netherlands. Indeed, the Netherlands was the only country in the top 10 in which revenue from fixed income grew YoY.

Fees from financial institutions, at almost USD 3bn, contributed to around 50% of all sector fees, followed by industrials and energy. Meanwhile, real estate and consumer & retail saw the biggest reverse in fees from last year at around 63% and 61%, respectively.

APAC: fixed-income fees shrink, but local banks dominate top-five rankings

In conjunction with global fee-making for fixed income, fees fell in Asia-Pacific to a seven-year low of almost USD 5bn from a record high of USD 7bn as at 31 October 2021. JPMorgan’s supremacy elsewhere was shaded by domestic titans, with all five in the top-slot hailing from China and Japan: CITIC Securities, China Securities, Mizuho, China International Capital (CICC), and Bank of China. 

This is perhaps unsurprising given that more than 50% of fees came from China. Over the past 10 years, the country’s slice of fixed-income revenue has grown to 53% in 2022 YTD from 33% between 1 January and 31 October in 2013. Three of the top-10 fixed income fee-payers by country saw a rise compared with last year, indicating a healthy pipeline of deals: Australia (which is seeing a similar boom in M&A), Indonesia, and the Philippines.

The highest fee-generating sectors, as was the case elsewhere, were financial institutions, followed by industrials and energy.

*Dealogic Revenue Ranking Data: Dealogic uses a proprietary revenue model to estimate investment banking fees across four key products: M&A, equity capital markets (ECM), bonds or debt capital markets (DCM), and loans. Fees derived from each of the three regions indicate fees generated by client fee-payers in those markets.