Fees earned by investment banks worldwide hit a record in 2007 for the fifth year running, despite the losses caused by the credit crisis.
Investment banks earned record fees despite the credit crisis
Fees rose 21% to $84.3bn (£42.8bn), half of which came from advising on mergers and acquisitions (M&A).
The US was the main source of revenue, meanwhile Europe generated a third, according to International Financial Services London (IFSL).
But revenues are set to drop in 2008 as the world economy slows.
"Last year was a very good year for M&A, especially in Europe, but 2008 has got off to a weak start," said Marko Maslakovic, senior economist at IFSL.
By the end of last month, bank losses related to the sub-prime crisis totalled around $130bn and some analysts expect overall losses to reach $450bn in coming years, IFSL said.
Many big investment banks have reported huge write-downs on the value of investments related to the US sub-prime mortgage market, which lends to those with poor credit histories.
The credit squeeze has also made it harder for companies to borrow, which could lead to a decline in corporate takeovers and the fees they generate for investment banks.