HONG KONG - Financial advisory fees from mergers and acquisitions in Asia dropped to the lowest levels in 11 years in the first half of 2024, with little signs of a quick rebound amid declines in both announced and completed deals.

M&A fees in Asia totaled $1.5 billion in the first six months, the lowest since 2013, LSEG data showed. Japan alone accounted for 40 percent of that.

The total value of announced transactions in Asia dropped 25 percent year-on-year to $317.5 billion, also a 11-year low, the data showed, indicating transaction revenue might remain tight

The fee squeeze could add pressure to investment banks which in the past two years have already shed hundreds of jobs in Asia to cope with chilled capital markets and falling revenue.

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The total value of announced transactions in Asia dropped 25 percent year-on-year to $317.5 billion, also a 11-year low, the data showed, indicating transaction revenue might remain tight.

Completed deals, totaling $253 billion, were the lowest since 2009, when deep wounds of the global financial crisis severely disrupted market activities.

"A reduction in average deal size is driving much of the decrease in M&A deal volume year to date, as investors prioritize mid-sized opportunities over large transformative M&A," said Tom Barsha, head of Asia Pacific M&A at Bank of America.

Australia-based miner BHP Group walked away from its $49 billion plan to take over rival Anglo American last month after a six-week pursuit, killing for now what could be one of bankers' biggest paydays globally this year.

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Japan, the only market in Asia that recorded M&A growth in 2023, saw announced deals slide 23 percent in the first half to $61 billion amid a weakening yen.

Asia's slowdown compares with a 16 percent up-pick in M&A globally, with deals totalling $1.5 trillion.

Some bankers in Asia expect private equity, take-privates and digital infrastructure investments will drive deals, noting more sales processes could be launched toward the end of this year.

Rohit Satsangi, Deutsche Bank's co-head of M&A, Asia Pacific, said sponsors are bringing businesses back to market.

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"We are seeing more reasonable valuations supported by better financial markets and a wider group of buyers," he said.

Increased capital markets activity in the second quarter has resulted in increased early stage M&A discussions, which point to an improved outlook for deals, said Bank of America's Barsha.

"A critical element of dealmaking which remains subdued is investor confidence, and it is intrinsically linked to capital markets activity and valuations," he said.