SOURCE: The Boston Consulting Group

June 12, 2008 00:01 ET

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

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.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.

Contact Information

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    The Boston Consulting Group
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