Investment banking fees in the Middle East reached $237.9 million during the second quarter of this year, up 72 per cent from the first quarter, according to a report from Thomson Reuters.
However, fees fell 19 per cent in Q2 2014 compared to $375.9 million in Q2 2013, the report noted.
“Lazard earned the most investment banking fees in the Middle East during the first half of 2014, a total of $29.4 million for a 29 per cent share of the total fee pool,” said Nadim Najjar, managing director, Middle East & North Africa, Thomson Reuters.
A Frost & Sullivan report, released earlier this year, forecast that investment banks in the Middle East will remain profitable in 2014, bucking the global trend.
“Investment banks in Africa and the Middle East are characterised by high capital ratios, low reliance on debt, high profitability margins and high return on equity in comparison to their global counterparts,” said Sheetal Kothari, business and financial services senior analyst at Frost & Sullivan.
Meanwhile, fees from completed M&A transactions amounted to $110.9 million during the first half of 2014, up three per cent from the same period in 2013, said the Reuters report. It also accounted for 29 per cent of the Middle Eastern fee pool.
“Lazard topped the Middle Eastern completed M&A fee league table, while Qatar National Bank was first in the equity capital market underwriting fee rankings,” said Najjar.
The value of M&A transactions with any Middle Eastern involvement also touched $14 billion during the second quarter, the highest quarterly total since Q1 2011.
However, M&A deal values fell four per cent during the first half of 2014 to reach $19.7 billion, the report said.
Domestic and inter-Middle Eastern M&A amounted to $6.9 billion during the first six months, down 49 per cent from the same period last year.
Inbound M&A fell 19 per cent to reach $1.3 billion while outbound deals grew 83 per cent from the corresponding period last year to reach $7.6 billion in H1 2014 – the highest total since 2011.
“Qatar’s overseas acquisitions accounted for 46 per cent of Middle Eastern outbound M&A activity,” said Najjar.
“The largest deal during the first half of 2014 was Labregah Real Estate Co’s purchase of a $2.5 billion stake in Doha-based real estate development firm, Barwa Commercial Avenue Co. Boosted by this deal, real estate was the most targeted sector, accounting for 29 per cent of first half activity.”