On the surface, there aren’t many big surprises with the new investment banking league tables released by Dealogic (below). In terms of global revenue, only one new bank jumped into the top 10. Finishing ninth, Jefferies displaced RBC, which booked the 10th most revenue in 2017. The other headliner is Bank of America, which was leapfrogged by Morgan Stanley, mostly due to BofA's underperforming M&A group.
That said, the main takeaway may be the continued dominance of J.P. Morgan and Goldman Sachs. Finishing first and second yet again, both banks increased their market share by a considerable number. J.P. Morgan’s global investment banking revenue share jumped from 8.1% in 2017 to 8.7% last year; Goldman Sachs’ share rose from 7.2% to 7.8%.
While those increases may not appear overly significant, they are. Each investment bank earned around $300m more in revenue in 2018 than they did the previous year, which is more impressive when you consider that the top 10 banks collectively brought in roughly $1.5b less in total IB revenue last year. The numbers fell in every region except Europe (+2%) and Australiasia (+20%). Meanwhile, Bank of America, Citi, Credit Suisse, Barclays and Deutsche Bank all ceded market share as their IB revenues fell year-on-year. Morgan Stanley and Jefferies were the only two other banks to see increases in revenue and market share.
Both J.P. Morgan and Goldman Sachs rode a hot hand in M&A and equity capital markets (ECM) while their debt capital markets (DCM) group faded a bit. J.P. Morgan was particularly dominant in ECM as it passed Morgan Stanley for the top spot by booking $120m more revenue in 2018 than it did the previous year. With many banks prioritizing businesses like wealth management, the strong got even stronger in investment banking in 2018.
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