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Things keep getting worse for EU banks

Investment banking in Europe is down, as Wall Street firms expand their presence overseas.

European Union banks just can't catch a break.

Many of them are still slogging uphill to recoup share price losses incurred from the Brexit vote in the U.K. European investment banking revenue overall is down 23 percent this year compared with the same period in 2015, according to data tracker Dealogic. And all are lagging behind U.S. banks for wallet share, or how much revenue they take in from dealmaking compared to competitors.

JPMorgan Chase tops every bank in the EU for wallet share, with 7.3 percent of deals, according to data from Dealogic this week.

It's followed by Goldman Sachs, which has 6.2 percent of deals, and only then, in third place, is an EU bank: Deutsche Bank has 5 percent of revenue on European mergers and acquisitions. But European banks (and their American counterparts) are fighting off a rising tide of boutique banks that have taken a growing percentage of M&A revenue from them over the last decade.

German Chancellor Angela Merkel, French President Francois Hollande (L) and European Union Commission President Jean-Claude Juncker.
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German Chancellor Angela Merkel, French President Francois Hollande (L) and European Union Commission President Jean-Claude Juncker.

Around the world, M&A levels have declined from recent record highs. But the pain is exacerbated in Europe, where big banks experienced a steeper drop off in revenue.

Dealogic data show that investment banking in Germany, for example, is down 45 percent. Globally, European deals account for just 22 percent of banking revenue, the lowest margin since Dealogic began tracking investment banking wallet share.

That comes in the wake of banks being hit especially hard on concerns about elevated loan losses, especially those coming from oil and gas assets.

But there is one small silver lining for EU banks. The European Central Bank's decision to ramp up bond buying means Europe's banks may find themselves working on more debt deals that juice their top line. So even if EU banks are stuck fighting off their American counterparts for M&A deals, they have another lever to pull to generate more cash.

Correction: European investment banking revenue overall is down this year compared with the same period in 2015. An earlier version misstated the time frame.