Investment Bank Bubble Spoils Collapse

By STEPHEN GROCER at The Wall Street Journal

The volatility that hit markets in the first part of the year has weighed heavily on investment banks, whose fees were down 36% in the first quarter from the same period a year earlier, WSJ’s MoneyBeat reports.

  • $12.8 billionInvestment-banking revenueSo far this year, the lowest quarterly total since the height of the financial crisis
  • $2.3 billionFees from equity offeringsA drop of 55% from the same period last year

Markets tumbled to start the year as investors fled risky assets, such as equity and high-yield bonds. The value of equity and high-yield bonds coming to market globally this quarter is down 46% and 68%, respectively. IPO volumes tumbled 74% world-wide, according to Dealogic.

Fees from selling debt this year sit at $4.1 billion, down 32% from the first quarter of last year. The slide was driven by a 70% tumble in revenue from selling junk bonds, according to Dealogic. The one bright spot came from China, where revenue from debt offerings reached $615 million this quarter, up 79%, according to Dealogic.

Read the full story on WSJ’s MoneyBeat

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