Fee bonanza for bankers in pandemic deals spree

Investment bankers are set to reap bumper fees this year despite the coronavirus slump as they work on a series of emergency fundraisings, takeovers and stock market listings.

Already this year, they have raked in £2.8billion in fees as UK companies have issued bonds, sold new shares, or combined with their rivals, according to data from Refinitiv.

Although this is down slightly from the £3billion they had made by this point last year, the total is set to shoot up over the coming weeks as a flurry of companies including Rolls-Royce, Meggitt and British Airways owner IAG look to raise money from investors.

Already this year, investment bankers have raked in £2.8billion in fees

Already this year, investment bankers have raked in £2.8billion in fees

Already this year, investment bankers have raked in £2.8billion in fees

Rolls will also be keeping bankers busy on the deal advisory side, as it looks to pull in £2billion by selling various divisions.

And a number of significant deals due to complete later this year – including the £20billion merger of the London Stock Exchange and Refinitiv, which is set to pay out more than £281million in fees – will add to this total.

As privately-owned businesses gain more confidence to resume listings on the stock market, following a dearth of activity over the summer as lockdown put plans on ice, investment bankers will see yet more work flow in.

The Hut Group, which announced its £4.5billion initial public offering this week, is expected to hand £50million to its group of eight investment banks working on the float.

But the biggest increase in activity for City bankers this year has been in bond issuances, as cash-strapped firms borrowed from investors to make ends meet.

They have pulled in £811million in relation to bond issuances, up 35 per cent from the same time last year.

Fees related to equity raises, where firms have asked investors to buy new shares, are also up 6.5 per cent to £546million.

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