Once upon a time, people used to talk about "bulge bracket investment banks." Now it's more normal to talk terms of banks that are tier one, tier two, or tier three - but which is which? And do you work for a top tier bank or something more diminutive? Today's release from research firm Coalition answers all these questions and more.
The tier one global investment banks: JPMorgan, Goldman Sachs, Citi, Morgan Stanley, Bank of America Merrill Lynch (in that order)
If we take tier one investment banks to mean banks which are global leaders in most product categories, there aren't many. As the Coalition chart below shows, there's actually only one: JPMorgan. JPM ranks first or second globally across all product areas (municipal finance excepted). As the regional charts at the bottom of the page show, J.P. Morgan is also strong across markets in the U.S., Europe and APAC.
Behind JPMorgan, Goldman Sachs and Citi battled it out for second place last year. Goldman Sachs was best overall in M&A, Citi was best overall in macro trading Behind them, Morgan Stanley is strongest in cash equities and Bank of America Merrill Lynch has lost its top slot in credit trading.
The tier two investment banks: Deutsche, Barclays, Credit Suisse, HSBC, UBS
While you have a strong chance of working for a top tier business at J.P. Morgan, you need to select where you land very carefully if you're going European.
For all its struggles, Deutsche Bank is still the strongest European bank globally. It's first globally for credit trading and it's third for securitisation (although it's slipped down the ranks for G10 FX). It ranked third for fixed income trading in Europe in 2018 (down from second in the first half of the year alone) and third in APAC. Deutsche's problem is the U.S, where it doesn't rank highly for anything at all.
By comparison, Barclays and Credit Suisse are stronger in the U.S. market and UBS is stronger in APAC. HSBC, predictably, is biggest in APAC, where it ranks third overall.
Beyond the first and second tiers things get a bit more complicated. Just because a bank's not top ranked globally, it doesn't mean it's not strong in its home market or a particular niche. BNP Paribas, for example, ranks outside the top 10 in the U.S, and APAC, but is comparatively strong in Europe. SocGen is a top three player in equity derivatives and futures and options trading, but is grounded in Europe and lacks a real presence elsewhere.
Using McKinsey's categorization, it's evident that many of the tier three banks occupy the category of, 'regionally focused banks strong in some product areas.' The same applies to Nomura in Asia and Wells Fargo and RBC in the Americas.
Have a confidential story, tip, or comment you’d like to share? Contact: email@example.com in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)