Interactive: The Evolution of Investment Bank Fees
The Evolution of Investment Bank Fees
Investment banks traditionally make money from fees in four ways: debt capital markets, equity capital markets, mergers & acquisitions, and syndicated lending.
This interactive infographic shows how that fee “pie” has changed in size and split over the last two decades. Note that for 2014, it only includes data for the first five months or so.
Interesting note: 2007 was the best year for investment banking, and this was right before the Financial Crisis as things began to unravel. Banks took in $89.8 billion in fees with about 33% of that money coming from debt markets, including securities such as CDOs (collateralized debt obligations) and other subprime-related instruments.
Over the next years, total fees would drop to $59.6 billion (2008) and then $58.7 billion (2009). The allocation of debt capital markets would only make up 23.8% of fee revenues in 2009. Today, the debt capital markets make up roughly the same percentage.
Original graphic from: eFinancial News