NEW YORK (Reuters) – JPMorgan Chase & Co (JPM.N) was the world’s biggest underwriter of stocks and bonds in the third quarter, as turmoil in equity and credit markets weighed heavily on new business and on reported fees, Thomson Reuters data show.
New issue volume plunged 43 percent from a year earlier to $803 billion from $1.4 trillion, including plunges in the United States of 91 percent in initial public offerings, 83 percent in mortgage-backed securities, and 68 percent in investment-grade corporate debt.
For all of 2008 to date, new issuance volume is down 36 percent to $3.95 trillion. JPMorgan, which acquired Bear Stearns Cos in May, appears on pace to end Citigroup Inc’s (C.N) eight-year run as the world’s biggest underwriter.
A seizing up of many credit markets, together with the unwillingness of many investors to lend even to borrowers considered good credit risks, has made it more costly, and in some cases impossible, to borrow.
This could lead to 40,000 layoffs on Wall Street alone, and a halving of year-end bonuses, New York State Comptroller Thomas DiNapoli estimated. Many bankers and traders depend on bonuses for the bulk of their annual compensation.
JPMorgan arranged $80.4 billion of offerings in the quarter, for a 10 percent market share, Thomson Reuters said.
Barclays Plc (BARC.L) vaulted to second from 10th a year earlier, handling $62.8 billion of offerings. Deutsche Bank AG (DBKGn.DE) ranked third, with $61.5 billion. Barclays this month bought bankrupt rival Lehman Brothers Holdings Inc’s (LEHMQ.PK) North American investment banking unit.
Reported fees dropped 23 percent to $2.36 billion. JPMorgan led with $564.4 million, followed by Merrill Lynch & Co’s (MER.N $355.7 million and Goldman Sachs Group Inc’s (GS.N) $303.6 million.
For the January to September period, JPMorgan arranged $379.4 billion of offerings, followed by Deutsche Bank’s $278.7 billion and Citigroup’s $265.2 billion. Barclays rose to fourth from eighth.
Reported fees are down just 2 percent year-over-year to $11.23 billion. Citigroup is first with $1.56 billion, followed by JPMorgan with $1.42 billion and last year’s fee champ Merrill Lynch, with $1.13 billion.
By Jonathan Stempel