As the world’s biggest banks have seen revenue shrink by $13.2 billion amid an ongoing dealmaking drought, JPMorgan has extended its lead at the top of investment banking fee league tables. The US investment banking giant took 8.6 per cent of the deal making fee pool globally in the first three quarters of this year, according to data provider Dealogic. That was up from 7.8 per cent at the same point in2022.
Second-placed Goldman Sachs took 7 per cent of investment banking revenue, down from 7.3 per cent in the first nine months of last year. The global investment banking fee pool has dropped 21 per cent so far this year to $48.7 billion, following a difficult period for dealmaking last year. The $12.3 billion earned in Europe, Middle East and Africa (Emea) this year is down by 24 per cent.
Goldman Sachs has retained its top spot in the mergers and acquisitions (M&A) fee league tables – a position it has occupied for two decades. However, JPMorgan has closed the gap: Goldman took a 10 per cent market share in the first nine months of this year, down from 10.6 in 2022, while JPMorgan’s share jumped from 7.8 per cent to 9.7 per centand the bank is promoting a 17-year insider to lead its major investment business, according to Market Watch.
Global industry co-head for energy, power, renewables, metals and mining Jay Horine has been tapped to become head of North America investment banking client coverage. He brings more than 30 years of total investment banking experience, including 12 years at Goldman Sachs prior to joining JPMorgan in 2006.
Investment banks have kept fighting their way against an ongoing deal drought that has forced many to make their biggest job cuts in years. Goldman stripped out 3,200 employees in January and a further 125 managing directors in June, while Morgan Stanley and Citigroup have also cut thousands of jobs.
Credit Suisse’s acquisition by their rivals UBS last March is also expected to lead to more job losses as the two businesses integrate. UBS’s investment banking fees fell sharply by 49 per cent during the first nine months of this year. However, the bank’s ranking now includes Credit Suisse’s revenue, which has stalled since the takeover.
Goldman’s 25 per cent year-on-year decline in dealmaking fees is the steepest of any major Wall Street bank this year. JPMorgan’s 13.5 per cent fall is less than the other top five Wall Street investment banks.
A predicted rebound in M&A and equity capital markets activity has been slow to rise this year, but banking executives are increasingly optimistic starting the fourth quarter.
Jefferies CEO Richard Handler and president Brian Friedman said in a statement accompanying the bank’s third-quarter earnings that “green shoots” have “multiplied” in recent weeks.
“There’s activity under the surface – the ducks are paddling furiously and we’ll just see over the next few months how much they move,” Barclays chief executive CS Venkatakrishnan said at an industry conference earlier last month.
Citigroup has regained its third position in Emea, with fees dropping 14.5 per cent over the past year compared with more than 30 per cent falls at both JPMorgan and Goldman Sachs. The bank is in the midst of a fresh overhaul, unveiled by CEO Jane Fraser in September, but it remains focused in Emea on targeting the top dealmaking spot, executives said.
BNP Paribas is also aiming for a top-five position in the region, having bolstered its equity capital markets and M&A teams in recent years. The French bank ranks fifth at present, up from eighth at the same point in 2022, with $558.7 million in revenue – a drop of nine per cent compared with last year.
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