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JPMorgan NYSE:JPM Named # 1 Investment Bank

GS, MS, FB

JPMorgan is # 1 in the Bloomberg 20, Bloomberg Markets’ 9th annual ranking of the best-paid investment banks measured by the fees earned.

The largest US lender took in $3.97-B in fees in Y 2012, a 24.8% increase over Y 2011.

JPMorgan has topped the Bloomberg 20 in 4 of the past 5 yrs, and last year it was the Top investment bank in debt and equity fees as well as overall. Goldman Sachs Group Inc. NYSE:GS ranked $ 2, after scoring the # 1 spot in Y 2011. Goldman led the ranking for M&A fees, as it has every year since the Bloomberg 20 began.

While fees for M&A and equity issuance fell in Y 2012, total fees rose 3.7%, to $50.9-B, driven higher by a rise in the refinancing of corporate debt.

In equities the fees are for initial public offerings IPOs and secondary offerings separately because they tend to have different fee structures. In both equities and bonds self-led deals are excluded, which are the sale or issuance of a financial institution’s bonds or equities by its own investment bank.

M&A fees are rarely disclosed and typically vary according to the size of a deal and whether a bank is advising the target, acquirer or seller.

Bloomberg based itsY ranking on the fees disclosed in about 600 M&A transactions going back to 2009, and they took an average of the fees for advisers to targets, acquirers and sellers for deals in five different size categories and applied those percentages to transactions for which fees were not disclosed, then divided the fees equally among advisers.

In practice, investment-banking fees vary from firm to firm. A bank’s position in this ranking may differ from its standing in traditional league tables, which are based on the dollar value of transactions

One soured Y 2012 deal put a chill on the market. Morgan Stanley NYSE:MS managed the initial public offering of Facebook Inc. NASDAQ:FB in May, and faced withering criticism when the NAS listing was marred by technical difficulties and the stock, by September, had fallen more than 50% below its 38 opening price. Facebook shares have since rebounded to 27.25 as of 28 February.