Investment-banking fees in the Middle East have risen 13 percent this year, with HSBC Holdings Plc and Citigroup Inc. leading the rankings, according to Freeman & Co.
Income for the first five months of the year rose to $317 million, the most since 2013, and up from $280 million a year earlier, according to data compiled by the New York-based research firm. Arranging M&A transactions accounted for $111 million, or more than a third of total fees, the data show.
HSBC and Citigroup captured the greatest share of the investment-banking fee pool, with the London-based bank earning $36.7 million from deals, or 11.6 percent of the total, and Citigroup earning $27.5 million or 8.7 percent, according to Freeman. Deutsche Bank AG ranked third with $16.8 million.
Oil’s near 50 percent drop in 2014 prompted speculation that Middle East transactions would slow as countries such as Saudi Arabia and United Arab Emirates curbed spending. Instead, increased volatility in the markets and demand for liquidity among clients in the region is leading to an increase in M&A deals, Barclays Plc said in April.
The value of deals in the Middle East and Africa region is up 25 percent this year to $28 billion, according to data compiled by Bloomberg. Emirates National Oil Co. this week agreed to buy Dubai-based Dragon Oil Plc for 1.7 billion pounds ($2.6 billion) and Qatar Investment Authority agreed to pay HK$9.3 billion ($1.2 billion) to buy a stake in Hong Kong billionaire Li Ka-shing’s electric utility.
Income from equity capital market deals rose 67 percent during the first five months, even though few companies sold shares in initial public offerings, the Freeman data show. Some companies are now pushing ahead with share sales after delaying them at the start of the year.
Buyout firm Abraaj Group is working with Bank of America Corp., Goldman Sachs Group Inc. and JPMorgan Chase & Co. as it plans an IPO of its stake in a credit-card processing business, people with knowledge of the matter said this month. Abu Dhabi-based Centurion Investment also hired banks to sell shares in CosmeSurge and Emirates Hospital Group, people said in May.
Banks earned most ECM income from other equity transactions, such as private placements and rights issues, the data show.
Fees for bond sales fell 25 percent from a year earlier, the data show. The amount raised in bond sales in the Middle East and North Africa this year dropped to $23 billion from $28 billion a year earlier, according to data compiled by Bloomberg. Market volatility caused by the debt crisis in Greece is deterring borrowers from selling debt.