Daily Management Review

Americans Are Leading in the Investment Banking Race


03/09/2016


Five of the largest American investment banks in 2015 surpassed their competitors from Europe by almost all financial indicators. Revenue of US investment banks last year amounted to $ 138.5 billion, meanwhile revenues of European – to $ 60.1 billion.



Carlos Delgado
Carlos Delgado
The total pre-tax profit of US investment banks totaled $ 33.5 billion against only $ 4.2 billion in Europe.

Investment banks in the US bypassed European competitors by the size of the commission even in Europe, the Middle East and Africa, where the positions of European banks are traditionally strong.

Revenues of divisions of investment banks such as Deutsche Bank, Barclays, BNP Paribas, Credit Suisse and UBS in 2015 fell by almost 8%. At the time, revenues of JPMorgan, Citigroup, Morgan Stanley, Goldman Sachs and Bank of America fell by only 0.8%.

According to analysts, the market conditions in the last year have been very favorable to US banks: their commission income increased significantly in the domestic market, while the stagnation was recorded in Europe.

US authorities have forced US banks to restructure more quickly after the financial crisis of 2007-2009. In Europe, Credit Suisse, Deutsche and Barclays are restructuring just now.

"I expect that we will increase our stake (in the global market), compared with US banks", - said head of the investment units of Credit Suisse Jim Amine. Revenues from Credit Suisse’s investment banking services fell 17% last year.

Amin also said that he was forced to reduce the plan to hire employees by the end of last year, taking into account market conditions at the beginning of 2016, the deceleration of the Chinese economy and the falling prices of commodities. "Given that we are trying to increase revenue and market share, we are looking for ways to cut not wages, but other expenses," - he said.

Head of division for corporate and investment banking (CIB) Deutsche Bank in North and South America, Paul Stefanick is also positive about the prospects of this unit. The Bank plans to increase sale of securities and to hire more employees in the investment division.

source: ft.com






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