High margins, rising revenues - ECM looks like the place to be

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As the year progresses, ECM looks increasingly appealing. Between the first and second quarters European and US underwriting fees rose 238 and 267 percent respectively according to Dealogic. Most banks saw ECM revenues soar as a result.

Much of this activity was down to banks' own efforts to raise capital to repay TARP funds; IPOs remain subdued. However the big backlog of companies waiting to go public means that Breaking Views is predicting an uptick in European IPOs in the autumn.

Equally promisingly, analysis from Bernstein Research suggests ECM is the highest margin area of banking. Regression analyses dating back to 2000 suggest normalized pre-tax margins in equity underwriting are 50.1%, compared to 41.6% in M&A, 32.3% in asset management, 24.9% for fixed income trading, and just 13.8% for equity sales and trading and 5.9% for debt underwriting.

Unfortunately, there doesn't seem to be a huge amount of hiring just yet. BarCap, Nomura, RBS, HSBC are all said to be looking to add headcount in ECM, and corporate broking is hottish, but recruiters are fairly languid about the market's prospects.

"There are a fair amount of people moving from one place to another and it's picking up slowly, but it's still mostly senior hires," says Jonathan Evans at Sammons Associates.