Chinese investment banks are eating Wall Street’s lunch in Asian equity listings.

Even as deal volumes hit record levels this year, Wall Street banks are earnings less from helping companies raise equity in Asia, said a Thomson Reuters quarterly survey of investment banking activity.

Equity listings in the Asia-Pacific region excluding Japan surged 40% to a record $197.2 billion in the first nine months of 2015 from a year earlier, but fees earned by the international banks in this space fell or remained flat over the same period, a consequence of tougher competition in a segment that generates the lion’s share of investment banking revenues in Asia, according to Thomson Reuters/Freeman Consulting estimates in the survey.

Among the top 10 fee earnings in the Equity Capital Markets (ECM) category, only four were international banks. To be the best performing international bank for the first three quarters, UBS only had to keep its revenues flat at $205.9 million.  J.P. Morgan’s fees fell 15.7%, while Goldman Sachs and Morgan Stanley both saw nearly 20% declines.


The top earner overall was CITIC Securities, which saw a 50% increase in fee income to $246 million. The other top Chinese earners were Guotai Junan Securities, whose fees rose 58%, and China Merchant Securities, which nearly doubled its fee income. All six of the top Chinese players saw fees increase.

“The Chinese houses are slowly but surely building up market share at the expense of international players,” Philippe Espinasse, a former ECM banker at UBS and Nomura, told Reuters.

Equity underwriting accounts for about half of all investment banking revenues in the Asia-Pacific region compared with just 16% for merger advisory fees, reported Reuters. But in the US and Europe, ECM only accounts for 20% of total investment banking fees, as most come from merger advice.

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