IPO shortages, falling stock prices, and slowing global economic growth are clouding the revenue outlook for global investment banks after pandemic spending by governments and central banks hit box office hits in 2021.
The Russian invasion of Ukraine and significant monetary tightening have led to volatile trade in financial markets this year. While this helped with trading volumes, it slowed down initial public offerings (IPOs) and deals led by special purpose buyout companies (SPACs).
Global investment banking net income fell nearly 38% to $35.6 billion to date, from $57.4 billion in the same period a year ago, according to data from Dealogic. Data showed global investment banking’s total net income for 2021 was a record $132 billion.
Biggar said banks will recoup some of the stronger equity and fixed income, foreign exchange, and commodities (FICC) trading volumes from last year, but will be “much lower in the quarter overall.”