Investment banks are set to reap record fees from advisory and underwriting this year, driven by the boom in mergers and acquisitions. The increased activity has resulted in JP Morgan toppling Citigroup as highest earner in 2006.

Investment banks earned $51.3bn (€40.5bn) in revenues from global advisory and underwriting. On an annualised basis, these rise to $68.1bn for the year, surpassing last year's peak of $64.1bn. The US provided 44%, worth $22.5bn, of this year's fees; 36%, or $18.6bn, was earned in Europe, the same as last year, according to data compiled by Dealogic. European investment banking fees are on course for a record year, with banks such as Morgan Stanley and Citigroup announcing that fee income after nine months has beaten the full-year total for 2005. The value of M&A in Europe is about to surpass last year's and is on course for a record, as reported by Financial News last week. M&A deals worth $1.18 trillion in the region have been announced in the year to September 22 – $54bn less than in 2005, according to data provider Thomson Financial. Equity and debt capital markets fed off a surge in bid activity and all the investment banks have produced higher revenues than in the corresponding period last year. In investment banking,JP Morgan climbed one place to top the table for fees, overtaking Citigroup, the highest in 2005. JP Morgan earned $3.9bn. Its M&A and loans operations performed particularly well. Revenues stood at $4.4bn last year. Citigroup's revenues were $3.5bn, followed by Goldman Sachs and Morgan Stanley, with $3.4bn and $2.9bn respectively. The largest deal of the year is AT&T's takeover of BellSouth for $83.4bn. German utility E.On has moved a step closer to sealing its controversial bid for Spain's Endesa. It upped its offer by 40% to €37bn ($47bn) last week.