It could have been ‘A Tale of Two Cities’ after trading updates from two investment banks in the Square Mile on Monday.
Numis Corporation PLC (AIM:NUM) said in its trading update that despite weaker overall investment banking markets, it delivered a resilient first-half performance, with revenue expected to be up 14% at around £64mln.
The AIM-traded firm said the outlook for mergers and acquisitions remained positive, with a record first half for advisory. However, the continued scarcity of UK capital market transactions resulted in lower investment banking revenues in the six months ended 31 March 2023, and equities revenues, which had a good start to the year, would be lower than the comparative period, due to both institutional income and trading businesses experiencing a weaker end to the half year.
Meanwhile, in its update, Peel Hunt Ltd (AIM:PEEL) said its revenue in the financial year that ended on 31 March 2023, will be in line with market expectations at about £82mln, down 39% from £131.0mln a year earlier.
The stockbroker and investment bank said it would be "marginally loss-making" in financial 2023, compared to market expectations of broadly break-even.
The revenue decline is due to an "uncertain global economic environment" hurting Investment Banking revenue, it noted, while capital markets activity was at "historic lows" throughout the recent financial year. Peel Hunt said costs increased as expected following its initial public offering, and it faces inflationary cost pressures.
In reaction, Peel Hunt shares were down 2.8% at 103p, while shares in Numis lost 1.7% to 211.50p in late afternoon trading.