Contact Information: Contact: Eric Gregoire The Boston Consulting Group +1-617-850-3783
Investment Banks Show Signs of Recovery Despite Difficult Market, Says Report by The Boston Consulting Group
With Challenges and Uncertainty Persisting in North America and Europe, Asia-Pacific Offers a Range of Increasingly Attractive Growth Opportunities
| Source: The Boston Consulting Group
NEW YORK, NY--(Marketwire - June 12, 2008) - Investment banks faced a difficult start to
2008, but showed signs of improvement. Revenues of leading banks remained
negative in the first quarter, largely due to
write-downs. Excluding write-downs, however, first-quarter revenues were
actually 18 percent higher than in the previous quarter. The report,
"Investment Banking and Capital Markets," by The Boston Consulting Group,
is being released today.
"This is far from a full recovery, but it shows that investment banks are
beginning to return to form," said Achim Schwetlick, one of the leaders of
BCG's investment-banking practice and coauthor of the report. "Write-downs
aside, first-quarter revenues were about 80 percent of what they were
during the same quarter last year."
The improvement was driven mainly by fixed-income activity. Revenues from
equities were in line with those of the previous quarter and were only 18
percent below the all-time high achieved in the first quarter of 2007.
Corporate-finance and advisory revenues fell from $11.9 billion in the
fourth quarter to $3.1 billion in the first quarter. They were about 75
percent lower than they had been during the same quarter last year.
The value of mergers and acquisitions declined by nearly 40 percent in the
first quarter -- from $1.2 trillion to $725 billion -- and was about 18
percent lower than in the same period last year. The decline in M&A deals
was most pronounced in the Americas and was much less dramatic in Europe,
the Middle East, and Africa.
Growth Opportunities in Asia-Pacific
The report examines opportunities for investment banks in Asia-Pacific.
"Some markets remain stressed by the financial crisis," said Schwetlick,
"but that should only encourage banks to look for new pathways for growth.
Several trends -- including deregulation, rapid economic growth, and the
accumulation of personal wealth -- make Asia-Pacific an attractive area for
growth."
The report outlines five major opportunities for investment banks in
Asia-Pacific, along with the questions that players -- both inside and
outside the region -- need to ask in order to start developing a strategic
growth plan for Asia-Pacific.
To receive a copy of the report or arrange an interview with one of the
authors, please contact Eric Gregoire at + 1 617-850-3783 or
gregoire.eric@bcg.com.
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