The US’s bulge bracket firms have a strong grip on their home and overseas markets. But their European rivals are tipped to fight back this year. Danielle Myles reports.
To every corporate and investment bank (CIB) in the world today, JPMorgan is a formidable competitor. It swept the 2016 league tables prepared by data firm Coalition, which rank each region’s top 12 banks based on revenues from investment banking (mergers and acquisitions, equity and debt capital markets), fixed income, currencies and commodities (FICC) and equities.
JPMorgan strengthened its lead as the world’s biggest CIB income-generator, claimed the top spot in all three regions, and ranked first globally for FICC and investment banking. Its only (relatively) weak spot was equities, where it had to settle for second place.
Americas round-up
The bank’s success is emblematic of US lenders’ dominance more generally. It has claimed the top five spots in the Americas for a few years now, but pulled even further ahead in 2016. “Morgan Stanley was one of the best banks for year-on-year growth, but the others are clearly so far ahead that it still ranks fifth,” says Amrit Shahani, a research director at Coalition. “That clearly indicates that the top five are maintaining and gaining market share in the Americas.”
Barclays held steady in sixth place, while beleaguered Deutsche Bank, historically a top-five player in the Americas, now shares seventh place with Credit Suisse.
Europe, Middle East and Africa round-up
The same US banks take five of the top six spots in Europe, the Middle East and Africa, and are among those growing fastest. JPMorgan and Morgan Stanley recorded the biggest increase in equities revenues from 2015 to 2016, while JPMorgan was one of the biggest improvers in FICC, alongside Bank of America Merrill Lynch, in investment banking. “It suggests there is a significant shift in client confidence from the European banks to the Americans, and just how much the latter have consolidated,” says Mr Shahani.
UBS slipped from sixth to 11th, and BNP Paribas from seventh to ninth. However Deutsche Bank has held on to second place, and both Barclays and Société Générale moved up to share sixth spot. More regional players are tipped to see similar improvements this year.
“I expect some of the European banks to fight back in 2017,” says Mr Shahani. “They will still be focused on specific products, unlike the US banks, which will provide a complete group offering across the region, but we expect them to get additional resources to win back some market share.”
Painful restructuring undertaken in recent years by European banks will start to bear fruit, and 2016’s large portfolio sales instructed by senior management – which led to some significant write-downs – are unlikely to be repeated in 2017. "Many suffered last year due to group-level issues, things beyond their control. But this year I think they’ll have a little more freedom,” says Mr Shahani. “That’s been the general direction among these banks. It’s slightly more positive compared with last year when they were trying to be much more cautious.”
Asia-Pacific round-up
Citi and JPMorgan are making strides in Asia-Pacific. They tie for first place and throughout 2016 grew revenues more than their peers. Citi held the top spot in 2015 too, but JPMorgan has stormed up the rankings from fifth. They are followed by a tightly grouped pack of Morgan Stanley, Deutsche Bank, Goldman Sachs and Nomura, which all rank equal third.
Nomura, the only Asia-headquartered bank to appear in Coalition’s rankings, is one of the biggest climbers. It moved up from eighth in 2015 off the back of its investment banking division, which generated more, and grew faster, than its rivals.
All data sourced from Coalition’s regional investment bank league tables is for 2016. Banks with revenues within 5% of each other rank equally.
