FEES earned for global investment banking services rose 7 percent in 2014, representing a seven-year high, as bankers handled the greatest value of mergers and acquisitions (M&A) since 2007.

    Five years after the end of the financial crisis, investment banking fees totalled US$83.9 billion as of Dec. 17, up from US$78.4 billion in the same period in 2013, according to Thomson Reuters data.

    Albeit far off a 2007 peak of US$101.8 billion, fees have rallied thanks to a deal-making frenzy and a revival in share offerings. Renewed confidence among large corporations spurred multi-billion deals in the healthcare, telecoms, and consumer sectors.

    Fees earned from completed M&A advisory rose 15 percent to a three-year high. Banks were paid US$26 billion for advising on some of the largest mergers in years such as Actavis’ US$66 billion purchase of Allergan.

    “The number of deals in excess of US$1 billion are up; they represent about two-thirds of total volumes in EMEA, or 250 transactions,” said Severin Brizay, head of M&A in EMEA at UBS.

    “Almost half of these deals are cross-border transactions and they account for a large majority of fees paid to market. For banks, it is critical to advise on these deals, or they end up in a marginal position,” he added.

    Investors have been supportive of record M&A activity as they seek higher returns. “We want to be able to get growth, that’s why we buy equities,” said Nigel Bolton, chief investment officer for the EMEA and Asia regions at BlackRock. “If you want just cash return, you buy fixed income.”

    After a year of regulatory investigations and in some cases multi-billion dollar fines, the M&A rise and the fees boost offer banks a particularly welcome focus. (SD-Agencies)