DUBAI, (Reuters) – Investment banking fees in the Middle East slumped in the first-quarter as political unrest in the region kept investors away from capital markets and crippled appetite for deals, data from Thomson Reuters showed.
Total investment banking fees for the first-quarter plunged 58 percent to $48.8 million compared with $116.3 million for the previous year.
Many countries in the Middle East North Africa (MENA) region has been plagued by violent political unrest which has forced investors to remain on the sidelines and cancel deal plans.
“Clearly the unrest in the Middle East has impacted the investment banking industry in the region during the first quarter, with very few deals being completed compared to the same period last year,” said Russell Haworth, Managing Director of Thomson Reuters Middle East & Africa, in a statement.
Mergers and acquisitions (M&A) activity saw the most impact, with fees plunging 66 percent to $16.7 million during the quarter. None of the leading banks had a major presence in the league table for the quarter.
Political unrest plaguing the region will delay planned deals, with activity seen flat versus last year, Standard Chartered mergers & acquisitions executives said last month.
UAE telecom firm Etisalat scrapped its $12 billion offer to buy a controlling stake in Kuwaiti rival Zain last month, partly citing regional unrest.
On the debt market side, Deutsche Bank topped the table with $4.1 million fees. Overall issuance reached $5.5 billion during the quarter, down 2 percent from previous year.
Equity markets issuance touched $1.3 billion, a 13 percent decline compared with previous year. ING earned the most fees in the segment.
The Middle East accounts for only a small portion of investment banking fees for global banks who mainly rely on the oil-rich region as a source of capital.
HSBC Holdings, Europe’s biggest bank, snapped the top position in the investment league table for the region in 2010 with a total fees of $37.9 million.