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HSBC’s global banking and markets division soared 8% last year as the UK financial institution raised trading fees and maintained trading profits across most asset classes.
The British financial institution posted revenue of $16.1 billion in its global banking and markets division last year, according to its annual results. Fees from capital markets and M&A activities rose 36%, and HSBC’s investment bank benefited from a rebound in debt underwriting income.
HSBC’s pre-tax profit in 2023 was $30.3 billion, a record high for the bank and an increase of 78%, but still below the $34 billion expected by analysts. CEO Noel Quinn said in a statement that the results “reflect four years of hard work and the strength of our balance sheet in a high interest rate environment.”
HSBC finished 16th in the investment banking fee league table last year, with a market share of 1.3%, according to data provider Dealogic. This is up from 17th place the previous year.
Revenue from the UK lender’s markets and securities services business was $9 billion, about the same level as in 2022. However, the $552 million in stock trading fees was only about half of the $1 billion the sector earned in 2022.
HSBC’s GBM business fell 4% to $3.7 billion in the final quarter of this year.
read HSBC increases bonuses for top investment bankers to $771,700
HSBC has strengthened its UK investment bank over the past year, hiring two senior dealmakers in corporate broking roles in July, while Barclays aims to consolidate its No. 1 position in the UK’s trading fee league table last year. is facing stiff competition. In recent months, hiring within the firm’s investment bank has focused on its core markets of China and the Middle East.
Investment banks are struggling with a continuing deal drought, with Wall Street and European banks alike reporting significant declines in M&A fees in 2023. British rival Barclays announced it would cut investment banking fees by 12% in 2023, driven by a 23% drop in profits. From M&A business.
Barclays also announced its first investor day since 2014 and separated its business into five main divisions, including the separation of its investment and corporate banks. The UK financial institution intends to reduce its dependence on investment banks, but not to retreat, and within its deal teams it intends to shift the balance away from debt underwriting and increase its focus on M&A and equity capital markets.
Deutsche Bank’s origination and advisory business grew by 25% in 2023, supported by a recovery in debt capital markets activity, while the M&A sector declined by 25%. The German financial institution hired 50 managing directors last year, with the aim of shifting the investment bank’s balance towards expanding its M&A and equity capital markets operations.
To contact the author of this article with feedback or news, email Paul Clarke
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