A tough start to the year for investment banks in Europe means fees have plunged by more than a quarter to $4.9 billion, while the value of takeover transactions was down by almost two-thirds to $183 billion.

The U.K. stood out as the most targeted country for M&A with $40.8 billion in acquisitions in the first quarter of 2019, but this was down from $113.4 billion a year earlier, according to financial data provider Refinitiv.

The country has been heavily targeted by corporate predators seeking to acquire assets at a bargain price since the fall in the value of sterling against other major currencies dating from the Brexit referendum in 2016.

Fees generated from completed M&A transactions totaled $1.6 billion, but that was a 27.9% decrease from 2018 and the lowest start to the year since the first quarter of 2013.

In overall investment banking fees, Citigroup Inc. topped the table for Europe with $309.6 million, taking a 6.3% market share, though it also recorded a 19% fall in the number of deals in which it was involved.

JPMorgan Chase & Co. was second with investment banking fees of $273.2 million, a 5.5% market share but a 28.5% fall in the number of deals.

Goldman Sachs Group Inc. was third with fees of $255.7 million, a 5.2% market share but a fall of 30.6% in number of deals.

Among the biggest M&A deals in Europe was U.S. firm Berry Global Group Inc. agreed bid to acquire the U.K.'s plastic packaging giant RPC Group Plc for $5.71 billion and the agreed bid by Triton, a Channel Islands-based bid vehicle backed by four investment funds advised by Apax, for satellite communications company Inmarsat PLC for $5.67 billion.

The value of announced M&A transactions with any European-based investment bank involvement reached $183.2 billion in the first quarter, down 64% year over year, and a six-year low. Deals with a European target reached were also at a six-year low, falling to $121.5 billion, down 66% from the same time in 2018, while inter-European and domestic deals decreased by 72% year over year.

Q1 'one of the worst' in recent history

Investment banks have already warned that the poor start to the year would have a significant impact on results. Sergio Ermotti, CEO of UBS Group AG, has said that the first three months of 2019 were shaping up to be "one of the worst first quarters in recent history" while Daniel Pinto, JPMorgan Chase's co-president, warned as early as February that the company's trading revenue would fall by a "high teens" percentage compared with the same period in 2018.

UBS' comments are backed up by research from Dealogic, a U.K.-based financial services firm, which forecasts that first-quarter investment banking revenues will be down nearly 45% at the bank. Dealogic data provides cold comfort for other leading U.S. and European banks, citing an average 19% year-over-year fall in revenue for the first quarter. Among those to be worst hit are Société Générale SA, which is forecast to post investment banking revenues down almost 35%, while HSBC Holdings PLC is forecast to report a near-30% fall.

Barclays PLC is forecast to report a 20% drop in investment banking revenues in the first quarter, according to Dealogic. Jes Staley, the CEO of Barclays, has taken over direct control of its investment banking operations from Tim Throsby, ahead of the bank's first-quarter results later in April. Staley is resisting pressure from Barclays' biggest shareholder, Edward Bramson, who wants the bank to drastically curtail its investment banking operation. Bramson is aiming to win a seat on the board at the company's annual general meeting in May.

Deutsche Bank AG, too, is under pressure and facing a prospective merger with Commerzbank AG. Dealogic forecasts Deutsche's investment banking arm is set to report an 11% fall in revenues, and the bank noted in its annual report that "activity levels are muted on a historical comparison."

Analysts at Credit Suisse Group AG said the weak progress being made toward Deutsche's profitability targets were likely to have been a factor in the decision by bank's management, led by CEO Christian Sewing, to support a potential Commerzbank merger before the bank reports first-quarter results on April 26.

However, Refinitiv data provides some bright spots for Deutsche: It recorded a 72% increase in its fee income from M&A activity to $73.2 million and increased its market share in this field by 2.7%.