<\/p>\n
President-elect Donald Trump’s return to the White House is seen fuelling a dealmaking revival that could bolster investment banking income to $316 billion globally next year, a jump of about 5.7% on 2024, data seen by Reuters shows.<\/p>\n
M&A bankers are forecast to rake in about $27.6 billion in fees, according to previously unreported figures from analytics and insight provider Coalition Greenwich, in what could be their second-best year in at least two decades.<\/p>\n
Global investment banking income has only topped $300 billion five times in the last 20 years, the data shows, with earnings power in recent years stifled by the pandemic, inflation and global political unease.<\/p>\n
Trump’s pro-business leanings should help an already thriving U.S. economy, which could in turn encourage greater volumes of cross-border dealmaking and investment from European firms chasing growth, bankers said.<\/p>\n
“I know it’s that time of year where bankers love to be bullish, but we actually do think that the current climate \u2013 political clarity and macro stability – will help drive M&A,” Richard King, head of corporate banking, EMEA, at Bank of America (BAC.N), opens new tab said.<\/p>\n
“There’s a lot of pent up demand that will likely come through in 2025,” he said, pointing to private equity as well as acquisitive trade buyers across a range of sectors including healthcare, tech and energy.<\/p>\n
Revenue from the trading of securities — the biggest contributor to investment bank income — forecast at $220 billion for 2025 would be the highest since 2022.<\/p>\n
Credit and emerging markets macro-related products are likely to see the biggest jump on 2024 figures next year, with a 6% increase each while trading in interest rate-related products could shrink as much as 3.5%.<\/p>\n
“We have healthy corporate balance sheets but we have a rate environment that has increased cost of capital…so businesses cannot be lazy,” said Taylor Wright, co-head of global banking at Barclays (BARC.L), opens new tab, predicting private equity firms will be active as both buyers and sellers of businesses.<\/p>\n
“Geopolitical risk, in our view, is the wild card. It’s hard to plan for that but absent that, we see a lot of factors that suggest that the next 12 to 24 months should be very good for investment banking.”<\/p>\n
Reuters<\/p>\n
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