How did your job function perform in 2017? Data provider Coalition has some answers for the Asia Pacific region. As the year draws to a close, it has just published a summary of investment banking and corporate banking revenues for 2017 (estimated to include the rest of this month).
Here’s our pick of the key trends from the new report.
IBD revenues were stable year on year at $5.9bn, although this is still the lowest-equal total since 2011, as the chart below shows. The Coalition report doesn’t provide sector-specific figures for 2017, but it does state that “ECM saw an improvement on the back of IPO and follow-on activity”. Hong Kong has become a hub for tech listings this year. Shares in Tencent’s ebook subsidiary China Literature soared by more than 80% on debut last month in the city’s largest tech IPO in 10 years. TMT bankers with ECM experience are in demand as result. DCM revenues in APAC also “improved” over 2016, but the gains in capital markets were offset by declines in M&A, in particular a fall in cross-border deals originating from “emerging Asia” (the region excluding Japan and Australia).
Global banks in Hong Kong and Singapore (notably Standard Chartered and Barclays) have been cutting jobs from their underperforming Asian equities teams over the past two years. More recently, Credit Suisse has also made redundancies in Asian equities. Now some good(ish) news: APAC equities revenues are expected to stay flat year on year at $9.5bn. “Cash equities remained stable, benefiting from a slight improvement in DMA/Algo but a decline in High Touch,” according to the Coalition report. “I think we’ve got to the stage where banks’ equities headcounts are about at the right size,” says a Hong Kong headhunter.
Revenues in fixed income currency and commodities (FICC) in APAC were up 13% year on year in 2016. These gains look likely to be wiped out this year, with Coalition predicting a 13% decrease to $12.4bn. APAC FICC underperformed both EMEA and the Americas because of “declining revenues across all products”.
Global banks are planning to step up their hiring in China following Beijing’s landmark decision last month to allow them majority stakes in joint ventures with mainland securities companies. But this year’s best performing region in APAC is expected to be… Australia and New Zealand (ANZ). This was “mainly driven by increased revenues across both markets and securities services”.
Image credit: piskunov, Getty