Australian investment banks are having their worst year since pre-GFC

This year is shaping out to be the worst since 2006 for investment banks involved in Australian deals, as they wrestle big drops in activity across MData provider Refinitiv’s tally of Australian deals and associated fees so far this year turned up a 66 per cent fall in revenue earned by investment banks compared to 2022’s March quarter – a period that fits neatly with RBA’s 10 consecutive rate rises starting in May 2022.

Corporate debt issuers remain sleepy, non-bank lenders are watching bank debt to see where the safer counterparts’ spreads land, and the Australian iTraxx Credit Index has shot up 20 per cent since January amid banking scandals., after Credit Suisse’s shotgun marriage with UBS wiped out Tier 1 investors.

Goldman Sachs had the biggest slice of the pie . UBS led ECM fees, cornering nearly a quarter of the total. with JPMorgan as Canadian giant Newmont made an approach. NAB was the top DCM bookrunner, likely helped by big four banks’ propensity to hire their own teams to run their multi-billion dollar raises.Equity investors have shown they are willing to push through chunky raises even amid heightened volatility. Troubled casino operator

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Australian banks have ‘simplified’ their approach to business risk managementMost Australian banks have “simplified' their businesses in order to increase control of risks, says Morningstar Senior Equity Analyst Nathan Zaia. “So we’ve seen the regulator really increase the capital requirements and how they approach risk,” he told Sky News Business Editor Ross Greenwood. “I think post Royal commission they have simplified their businesses as well. “So it’s easier to manage some of these risks when you are smaller and more focused.”
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