Spokesmen for New York-based Citigroup and Morgan Stanley declined to comment.
The drop in market share and the pullback by some Western banks may be hard to reverse, said SunTrust’s Wasserstrom.
“Many of these institutions are facing pressure to cut compensation and overall costs, simplify their business lines and address capital and funding issues,” he said. Emerging markets “present great growth opportunities, but some of the largest banks won’t be able to participate in that nearly as much, if at all. This may not be the case forever, but certainly for the foreseeable future.”
The following table shows the decline in share of investment-banking fees in emerging markets earned by banks based in Western Europe and the U.S., according to data compiled by Freeman. The shares represent the portion of total fees earned from clients in that region, and the percentages may not equal 100 because of rounding.
2005 2012
Latin America U.S. Banks 36% 31% Western European Banks 40% 31% Latin American Banks 12% 26% Others 12% 12%
Middle East U.S. Banks 14% 12% Western European Banks 47% 28% Middle Eastern Banks 25% 47% Others 14% 13%
Russia and Eastern Europe U.S. Banks 24% 24% Western European Banks 51% 38% Russian and E. European Banks 9% 23% Others 15% 15%
China U.S. Banks 34% 8% Western European Banks 24% 16% Chinese Banks 23% 69% Others 19% 7%
India U.S. Banks 39% 11% Western European Banks 22% 14% Indian Banks 19% 62% Others 20% 13%