Arguably the safest banks to work for in Middle Eastern M&A and DCM

The volume of debt capital markets (DCM) deals in the Middle East has been steadily increasing for some time now, but investment banks have still largely been reluctant to increase their headcount in this area. This could change if the current surge in activity continues.

In the first quarter of 2012 debt issuance in the Middle East reached $11bn, which is nearly double the $5,7bn raised during the same period in 2011, according to new figures from Thomson Reuters. Even better, the fees earned by the investment banks increased by five times $36m during Q1.

Sadly, this is where the good news ends. M&A activity is starting to come out of the doldrums; during the first quarter of 2012, M&A deals reached $4.9bn, which is an 83% increase on the (admittedly low) levels of the final quarter of last year and a 22% rise on Q1 2011.

Despite this, investment banks' fees in M&A tumbled to $46.2m – a 42% decline from the same period in 2011. However, unlike at this point in 2011, the large international investment banks account for the majority of activity.

Similarly, the anaemic activity in equity capital markets (ECM) is still ongoing, with just $1bn worth of deals announced during the first quarter – a 21% decline on this point last year.

Overall, therefore, investment banking fees shrank by 8% year-on-year. This doesn't sound like a huge fall, but it means that it was the worst quarter for investment banking fees since the second quarter of 2005. With such a small purse, any recruitment is likely to be muted going forward.

Here are the league tables for M&A and DCM: