2022 was not a good year for investment banking, as a slump in deals led to declines in fees and revenues at all major institutions. Credit Suisse's M&A business saw the sharpest decline.
Revenues and fees at the world's ten largest investment banks more than halved in 2022, with overall, fees from acquisitions and mergers weakening to $31.8 billion, according to a «Financial News» (behind paywall) report citing preliminary data from Dealogic. Compared to the bumper year of 2021, that's $34 billion less.
The most significant slump among the major investment banks was suffered by Credit Suisse with a decline of 58.4 percent to $1.8 billion.
A «Capital Light» Business
The slump has prompted many banks to cut jobs and slash bonuses, and it's no different at Credit Suisse, which just announced a new strategy, job cuts, and cost reductions in October. By 2025, the number of employees worldwide is to be reduced by around 9,000 to 43,000.
In addition, the investment bank will be spun off into the new «CS First Boston» unit, reviving an old brand name that Credit Suisse bought in the 1990s. It will be headed by former Citigroup investment banker Michael Klein. The focus is to be on the so-called «capital light» business, where the emphasis is on advice.
Sales Slump
In the aftermath of the Greensill and Archegos Capital affairs in March of last year, around 70 managing directors left the bank, the report continues. And while they have been replaced, it does take time for them to settle in.
Deutsche Bank, which reinvested in experienced dealmakers last year, saw the second-largest drop in fees in 2022, down 55.1 percent, according to Dealogic. Morgan Stanley, Jefferies, Citi, and J. Morgan also lost more than half. Royal Bank of Canada, Bank of America, Barclays, and Goldman Sachs reported smaller declines.
