Western banks continue to pile into emerging markets but their commitment faces its biggest test as domestic competition for revenues grows rapidly stronger and increasingly fierce. A decade ago, western banks found it easier to grab market share in emerging markets because these countries were short on capital and expertise. Now, many emerging markets have accumulated huge pools of onshore public and private capital reserves, and local banks and brokers are often better placed to manage, access and advise.

In 2010, the top investment bank fee earners in Russia, India and China were all domestic, state-owned firms. Figures from data provider Dealogic show that local investment banks claimed a 46% share of fees for most of last year, compared with a 54% share for western banks. Five years ago local banks commanded just 14% of the fee pool.