Dealmakers' fees up as M&A wilts

By Douwe Miedema and Jessica Hall

LONDON/NEW YORK (Reuters) - Dealmakers saw business pick up again in the second quarter as they helped companies raise cash in capital markets, but lucrative mergers and acquisitions (M&A) languished.

Worldwide combined capital markets and M&A fees rose for the first time in a year, Thomson Reuters data showed on Friday, up 29 percent from the first quarter, with share sales -- such as rights offerings -- the most buoyant.

"There's a shift away from banks being the sole capital source for growth. There are fewer banks in the world and they have less money," David Fass, head of global banking at Deutsche Bank (DBKGn.DE), told Reuters.

Banks are hesitant to lend after the credit crunch depleted their treasure chests, and cash-hungry companies are instead selling bonds and shares to rebuild their balance sheets, refinance maturing debt, or expand.

The year has seen mammoth bond sales to fund mergers, with Pfizer (PFE.N) raising more than $23 billion for its purchase of Wyeth WYE.N, after Roche (ROG.VX) sold $30 billion (18 billion pounds) in bonds to help buy Genentech.

Banks have embarked on massive rights issues to refill their coffers, with HSBC's (HSBA.L) $19 billion share sale in April topping the table of large deals, the second-largest rights issue of all time, according to the data.

"Markets for capital raising have been extremely active, you have seen equity balance sheet repair for the financial sector and increasingly the corporate sector," Enrico Bombieri, head of European investment banking at JP Morgan Chase (JPM.N), said at a media briefing this month.

JP Morgan benefited most from the surge in capital market transactions, topping first-half global league tables in equity capital markets, bonds and syndicated loans.