Aug. 1 (Bloomberg) -- Goldman Sachs Group Inc., the biggest U.S. securities firm by market value, and other overseas investment banks posted record full-year revenue in Japan as they earned more from brokerage commissions and merger advisory fees.

Goldman's local revenue rose to 256.5 billion yen ($2.4 billion) for the year ended March 31, from 231.3 billion yen a year earlier, according to filings to Japan's financial regulator made public today. Deutsche Bank AG, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and JPMorgan Chase & Co. also posted record revenue in the country, according to their disclosures.

Seven foreign banks ranked among the top 10 merger advisers in Japan for the fiscal year. Falling equity and bond markets in the wake of the U.S. mortgage-market collapse have increased Wall Street's reliance on advising, as profit from trading drops and Japanese companies take advantage of low stock prices overseas to buy into companies.

``Japanese blue chips are seeking to purchase stakes in companies abroad for expansion as they have plenty of capital,'' said Yuri Yoshida, an analyst at Standard & Poor's. ``That's generating more fee opportunity for Wall Street firms that have greater know-how and research than local banks.''

UBS AG's Japan unit had 134.1 billion yen of revenue for the year, down from 138.2 billion yen a year earlier. Credit Suisse Group's local revenue fell 6 percent to 100.9 billion yen.

Record Profit

Goldman's Japan profit also rose to a record, according to its filing. Net income swelled to 79 billion yen for the year ended March 31 from 29.6 billion yen. Total commissions climbed 18 percent to 213.6 billion yen as stock and brokerage trading fees rose and other commissions, including those for the merger advisory business, increased.

Takeda Pharmaceutical Co., Japan's largest drugmaker, bought Massachusetts-based Millennium Pharmaceuticals Inc. in April for $8.9 billion, the biggest acquisition this year in Japan. UBS advised Takeda, while Goldman advised Millennium. Tokio Marine Holdings Inc., the country's biggest insurer, agreed last month to buy Philadelphia Consolidated Holding Corp. for $4.7 billion in a deal advised by Merrill and Fox-Pitt Kelton Ltd.

Mergers in Japan rose to $81.5 billion in total value for the seven months ended July 31, from $71 billion a year earlier, data compiled by Bloomberg show.

Sumitomo Mitsui Financial Group Inc. invested in Barclays Plc last month, while Mizuho Financial Group Inc. bought a stake in Merrill earlier this year.

Revenue in Japan totaled 191 billion yen at Deutsche, 129.8 billion yen at Merrill and 85.5 billion yen at JPMorgan. Lehman's Japan revenue rose to 122 billion yen from 35.6 billion yen, while Morgan Stanley's fell 10 percent to 213.9 billion yen, the second-biggest figure among overseas banks in Japan.

Nomura Holdings Inc., Japan's largest investment bank, is the top merger adviser in Japan so far this year, followed by Goldman, UBS, Merrill and Mitsubishi UFJ Financial Group Inc.

To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

Last Updated: August 1, 2008 02:54 EDT