Morgan Stanley's banking analysts have produced a new report on the performance of leading investment banks in 2015. If you're a finance professional and are contemplating where to send your resume, we suggest you consult the charts below, derived from the report.
1. Goldman Sachs and Morgan Stanley are the big winners in equities sales and trading so far this year
In equities sales and trading, 2015 is the year of the big US banks. Goldman Sachs and Morgan Stanley both had an excellent first half. Barclays' equities business performed abysmally.
2. Morgan Stanley, HSBC, UBS and Credit Agricole are the winners in fixed income sales and trading this year
In fixed income currencies and commodities (FICC) sales and trading, Morgan Stanley was the standout success story in the first half. The US bank is rebuilding its fixed income business. Now could be a good time to join.
3. Goldman Sachs and J.P. Morgan are the big winners in IBD this year
IBD looks like equities sales and trading: Goldman and J.P. Morgan were the big winners. The Swiss banks and RBS were the big losers.
4. European banks are stronger than expected in US FICC
Don't dismiss Deutsche Bank's fixed income sales and trading business yet. The German bank actually increased its presence in US rates trading and overall in US fixed income trading in the first half.
5. And Credit Suisse is the market leader in U.S. securitized product trading...
Equally, Credit Suisse is the dominant player in US securitized product sales and trading.
6. But US banks dominate US credit and municipal bond trading...
7. European investment banks have cost issues
If you want to work for a bank that won't be making redundancies, avoid the Europeans and Nomura.
As the chart below shows, Nomura has a cost income ratio of around 90%, compared to a cost income ratio of below 60% at Goldman Sachs.
Morgan Stanley's analysts note that costs have become 'the key battleground' and that European banks don't have a great history of reducing them. They say that Deutsche Bank, for example, has failed to cut costs historically after going for 'too many expensive quick fixes (often offshore) which then locked in manual processes that fundamentally needed redesign and computerisation.' This may at least mean that banks stop shunting jobs to overseas locations in future.
8. But UBS is making an excellent return on equity
During its most recent quarterly call, UBS boasted about making a massive 36% 'return on attributed equity.' Simple return on equity at the Swiss bank isn't that high, but it's still a lot higher than anywhere else.