Foreign news: Big bank fines head upwards, China's banks dominate loans, investment bank revenues we
The world's top ten investment banks have already paid out almost as much in fines and penalties so far this year as they did in the whole 12 months of 2015, reports the Financial Times. Data compiled by analytics firm Corlytics shows the biggest banks paid US$9.8 billion in fines and settlements for the first eight months of 2016. This is well short of the height of "the fining boom" of 2013, when fines hit $58.2 billion, covering everything from mis-selling mortgage bonds to rigging foreign exchange rates. Goldman Sachs, fined more than $5 billion for mis-selling mortgage-backed securities, tops the penalty list for 2016 so far. The Thomson Reuters APAC loan league tables traces how China's large banks are increasingly dominating the region. On the league tables for Asia-Pacific ex Japan mandated arrangers, the top three places went to Chinese banks followed by fifth placed China construction bank splitting DBS and ANZ. NAB was in 11th spot just ahead of CBA (13) and Westpac (14). The pattern was similar in the year to date 2016 Asia-Pacific ex Japan book runner league tables, where ANZ sits on fifth spot. Despite a strong 2Q16 performance in fixed income, investment banking revenues for the first half of 2016 were weaker than 1H08, driven by softness in investment banking divisions and equities throughout 1H16, and a very weak 1Q16 in fixed income. This is the conclusion of a report by analytics firm, Coalition, which says "with revenues under pressure, banks are trying to protect their bottom line with renewed cost saving initiatives, including further headcount cuts and optimisation of their pyramid structure. Despite these cost savings coupled with reductions in risk-weighted assets and leverage exposure, investment bank ROE remains under pressure reflecting the negative revenue dynamic."