China investment banks report dismal fees as IPOs and M&As fall to decade low

Banks only raised $3.1b in fees from IPOs– a 78% decline from Q1 2023.

Investment banks in China recorded one of their lowest performing first quarter periods in 2024 as the number of companies going public, and the volume of mergers and acquisitions fell to their lowest levels in a decade.

An estimated $2.8b of investment banking fees were generated in China in Q1, 33% lower than a year ago, according to data from the London Stock Exchange Group (LSEG) Data & Analytics.

Equity capital markets (ECM) underwriting fees totalled just $301m during the period, a 77% decline compared to Q1 2023.

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This comes as traditional IPOs from Chinese issuers fell to a decade low, raising only $3.1b– a 78% decrease from a year ago. The number of IPOs dropped 60.7% in Q1, compared to the same period in 2023.

Meanwhile, China-domiciled companies raised only $3.4b via follow-on offerings, 84.8% lower than a year ago; and convertible offerings fell by 86.8% to $934.3m over the same period of comparison. 

Completed M&A advisory fees amounted to $117.8m, down 36% from the same period last year. 

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The overall China-involvement announced M&A activity fell to a decade low and amounted to $60.3b in Q1, an 18% decline in value compared to Q1 2023. Number of announced deals declined 22%, making it the slowest start to a year since 2013, LSEG Data & Analytics said.

Syndicated lending fees reached just $152.7b, down 67% from last year.

Debt capital markets (DCM) underwriting fees reached US$2.2b, remaining flat from a year ago.