Okay, good morning, all, and a warm welcome to ABG Sundal Collier's Q2 result presentation. Before we kick off the presentation, I would like to mention that we will, as usual, have a Q&A session after the presentation. Should you want to raise a question, please use the Q&A function in Teams, and we will answer all questions in turn. I'd also like to mention that we are joined by our CFO, Geir Olsen. Before we look more into the numbers, I'd like to start with some general comments about the quarter and our performance.
In the previous quarter, we talked about muted activity in equity capital markets, but also about signs that we noticed improved risk appetite towards the end of the quarter, which combined with more activity in the European IPO market, made us slightly more optimistic about a gradual improvement in the equity capital markets. And we can now conclude that while the local IPO window is so far only ajar, we have advised on two out of three main market IPOs in the Nordics, and we continue to see interest among corporates and investors to execute transactions picking up. But the improvement in ECM activity is nothing compared to the very vibrant DCM markets, where we're taking our fair share.
While the overall Nordic M&A market has been more muted, we have continued to deliver strong growth in our M&A franchise. This, combined with a continued solid performance from our brokerage and research operations, makes Q2 a perfect example of the importance of having top positions in all product areas ECM, DCM, M&A, and brokerage research, which we obviously have, and is something that distinguish ABG from our peers. We can adapt as we go in relation to ongoing products and transactions to cater for changing market conditions. In a way that would be more difficult without that stronghold position in all and every single product area. An IPO might end up in a high-yield bond, for instance, on the way.
We continue to focus on building a solid platform for providing the best possible advice to our clients with a relentless focus on keeping costs under control, leading to proven and solid profitability in a cyclical industry. May I remind you all that we have had operational profitability in every single quarter since we went public 23 years ago, operational profitability. On that note, cyclicality, I sometimes, and more often these days, get the question why we don't engage in adjacent businesses, such as fund management, for instance, to get more recurring revenues on our P&L. Well, my answer is always that whatever business initiative we undertake, such as private banking, we do it to become more relevant for our clients and potential clients, and as a consequence, that may or may not lead to, for instance, recurring revenues.
Okay, so with that, let's look at the numbers in more details, and flip to that slide, please. Looking at our revenue development on the left-hand side of this chart, it is not, with the exception of 2021, obvious that we are operating in a very cyclical industry with yearly and LTM revenues at ±1.8 billion NOK. Obviously, volatility is higher on a quarterly basis, with lumpiness in our revenues from investment banking, contributing to that quarterly volatility. That said, Q2 cannot be described as anything else than a very solid and strong quarter for us, with revenues up by 35% in the second quarter year-over-year, and thus by 13% in the first half of 2024.
After Q1, I talked about our intensified cost focus and initiatives during 2023 that were starting to have an effect, meaning that we were positioned to show good, healthy operational leverage on top line growth. I think we can conclude that that statement proved to be right, with margins improving from 18% to 21% year-on-year in the first half, and as clearly shown by the operating profit increase by 132% to 118 million NOK in the second quarter, year-on-year specifically. All in all, EPS went from 7 to 16 øre in the quarter year-on-year, and thus, up by 42% from 19 to 27 øre in the first half of this year.
So with that, next slide, please, and a bit on the macro and market backdrop, where I think it's fair to say kind of more of the same, i.e., more conviction about that we have the interest and inflation peak behind us. And that we clearly passed the interest peak, and we also are seeing shapes of a consensus when it comes to the interest rate curve and the shape of it going forward, which also provides some comfort to markets. And that has definitely contributed to equity markets continuing upwards and setting new all-time highs. Volatility, as you can see in the middle of the chart, has continued to stay low, and we always talk about the magical level beneath 20, the IPO window is open. Unfortunately, that is not enough.
We need to have risk appetite clearly back on track, and as I talked about previously, we see that coming gradually back in investors' mind locally as well. I think we could flip to next slide, please, and talk about how this has... And how the macro and market backdrop, generally, globally, has translated into how our different markets have behaved during the quarter and for first half of the year. And looking at equity markets, it is less than clear, looking at the headline, that there has been an improvement that I talked about. But we have to understand that a driver for us as an independent investment bank is mainly activity in IPO and primary placements and secondary placements for that instance as well.
Not rights issues, which tend to be more of a lending bank product. As you can see in the bars, the rights issue activity has decreased quite a lot, whereas the light blue shaded part of the bar, primary placement, has increased, which is benefiting a player such as ABG. You can also see that IPOs have started to reappear in the bars again in the dark blue shaded part of the bar, even though it's very, very low activity yet in this segment. While we see signs of improvement in equity capital markets, we don't have to look for signs in debt capital markets. It is crystal clear that markets are back in a very strong shape, with volumes up by more than 200% in the quarter.
This is partly driven by liquidity and strong inflows in local high-yield funds, that are chasing returns, pushing credit spreads downwards, which in turn is making room for new issuers again. And that is also something that benefits ABG, given our stronghold in the market for new issuers, where the positioning of the company or the case is so much more important compared to refinancing of outstanding debt and recurring issuers. And finally, looking at the M&A market, that continues to be stable, well, to slightly muted, perhaps, in terms of volumes and numbers of deals being down by 5%-6% over the quarter year-on-year and also the first half year-on-year.
Well, we obviously have some way to go before we're back at normalized levels, which tends to mean structured processes. It's still a lot of bilateral processes that make out quite a lot of the volumes, and as such, visibility is somewhat lower on executing and timing of these deals. But once again, as we can see in the coming slides, we tend to prove ourselves and our ability to deliver regardless of market conditions. So let's flip to next slide and look to starting off with corporate financing. I think we've done well with revenues almost doubling in the quarter to NOK 247 million after a soft start to the year for us.
As you can see on the right-hand side of the slide, we have been able to close a pretty wide range of different transactions during the quarter, both in ECM and DCM, and across geographies as well. I would especially like to highlight the placing in Vår Energi, one of the greatest and most impressive transactions, I personally think, at least in Norway in Q2. We carried out the placing with almost no discount on successful trading day, next day of trading, highlighting the strength of our entire franchise. I'd also like to pinpoint the successful IPO of Prisma Properties, a company active in a sector that has been experiencing some turmoil and difficulties, to say the least, during the last couple of years. Next slide, please.
Let's have a look at M&A and our activity within M&A. I talked about volumes being muted in the quarter and first half of the year, but we continued to deliver in this product area, with revenues up by 28% in the quarter, sorry, in the quarter, and by 43% in the first half of the year. We have also continued to observe broader participation from our different locations, including Sweden and Denmark in this quarter, as witnessed on the right-hand side of this slide, where you can see examples of a few deals. We expect a strong start to our M&A business in the year to continue looking forward, but with the inherent quarter-on-quarter volatility due to the lumpiness of project completion, obviously making any quarterly predictions difficult. Next slide, please.
Looking at our brokerage and research operation, that has continued to deliver revenues on a high level compared to what we've been used to looking back a few years, even though slightly down to NOK 288 million versus the very tough comparable on NOK 313 million first half of 2023. Contributing to this slight decline is the fact that secondary fixed income revenues have been more muted due to low volatility and higher primary activity in high-yield bonds, as talked about previously. But once again, I would rather focus on the absolute level being consistently higher versus a few years ago and expect us to continue to show high stability around this level going forward.
Looking at positive contributors to revenues, I would especially like to highlight the performance of our Norwegian equity desk. That has been able to acquire and activate new clients in a very impressive manner. The increased risk appetite and the improved block activity towards the end of the quarter have also contributed to expectations of a slightly better second half of the year. Okay, so with that, I'd like to leave the word over to Geir, who'll talk about costs and headcount, I believe. Over to you, Geir.
Thank you, Jonas. Not too much to say about cost this quarter, but I would like to comment that, as you see, our total cost base year to date is up 9%. This is mainly by design, as our variable compensation is a function of profitability, driven by the increase in revenues, as mentioned by Jonas. The total headcount is now just about 330 people. This is broadly in line with the last quarter and down 3% compared to last year. Looking at the ratio of total compensation relative to revenues, this was 56% in the quarter and 57% for the full year so far. This is a level we find to be in line with industry standards.
With respect to non-compensation costs, we see a slight increase, primarily due to cost inflation. Fortunately, this quarter, we have not been impacted by a weakening NOK, although the year-to-date impact is still NOK 6 million. But it seems like the NOK now has stabilized, at least for now. And finally, I would like to remind everyone that our new business initiatives are included in headcount and costs, and hence, underlying fixed costs in the current operation is actually slightly down. So that's pretty much what I had to say, Jonas, and back to you.
Okay. Thank you, Geir. So with that, I think it's time to summarize. And if we could flip to the next slide, please. Looking at the executive closing remarks. Thank you. We delivered a super solid performance in the second quarter, with revenues up by 35%, operating profit up by 132%. Something we delivered by closing more than 40 transactions and by continued stable revenue contribution from our brokerage and research operation. All product areas contributing to growth within investment banking. We talked about M&A, DCM, and also that we've seen signs of improvement and actually in the numbers as well in ECM. And when it comes to signs of improvement, we are mainly referring to the recent IPO sentiment being somewhat more positive in Sweden.
Our private banking initiative progressing well and according to plan, and we look forward to launching new products, and services later this year. And finally, our transaction pipeline has grown during the quarter with good diversity and limited dependence of a booming IPO market near term. So I think that were the main key takeaways, and with that, I'd like to open up the floor for any questions. Please.
Received, one question. What are your predictions for the IPO market, for the rest of the year and the next year? Is it about to open up now?
Well, we continue to believe there will be a kind of a gradual improvement during the year. As alluded to, we have conducted two recently. We continue to see interest from companies and their owners to approach the stock market via an IPO, so that bodes well. Having said that, given the lead times of normally 6 to 9, sometimes 12 months, for an average IPO product, the seismic shift in activity is not to be expected this year, but 2025 could very well be a strong IPO year.
Thank you. I think that's it for questions from the floor.
Okay. If there are no further questions, thank you for attending, and don't hesitate to reach out and contact any of us on this call if you have any follow-up questions. Thank you.