Title.
I would like to hear some thoughts about what bank(s) are most likely to either break through the MM or EB status and join the BBs. I know not every bank has this goal in mind obviously but just wondering what banks could get there realistically
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It'd be a big stretch for any of those to 1. become a huge global bank and 2. grow their balance sheet to BB level, even if inorganically
There's a reason you haven't seen "new" BBs in many years. Outside of a mega-merger like BofA/Merrill (which was a very unique situation, and this type of mega-deal would never be approved in today's environment), it's just implausible to grow that much in this regulatory environment.
Wells and RBC are likely closest to "BB" level but neither are global platforms and I don't see that changing materially
RBC has somewhat of an international presence. I think realistically they could very easily focus on this if they wanted to and make it a real source of business for them, but management has chosen not to over the last few years. I mean also inf you want to say "international" RBC is in Canada. RBC, I think could very easily be a strong international bank.
I am completely unfamiliar with the WF structure.
Yeah, RBC is big in Canada and the US, decent in Australia but fairly small in London and tiny in HK. Think to be considered a BB you really need a good global presence and strong revenues across most products.
Likewise, WF is puny outside of the US and even in the US they’re mainly a balance sheet bank - they get deal credit for lending on large transactions but if you look at their advisory fees, they’re tiny.
Not shitting on either bank, they’re actually pretty good places to work at from what I hear.
I'm sorry, but this question shows a complete misunderstanding of the sub-verticals within banking. "BB" is not like Tier 1 consulting or the top Big Law firms, where all competitors have the same business model. Bulge Bracket investment banking implies an end-to-end business model that includes financing, underwriting and advisory work. The "MM and EB" names you reference by and large don't offer the first two. It's not "oh not every bank has this goal", it's more like it's not a goal they have at all. Look at Evercore, they print more advisory business than some BBs but have no desire to begin offering financing. I suppose Guggenheim bough Millstein a while back, and I think that gave them the ability to underwrite, but they'll never be able to backstop a blue chip IPO the way MS can.
I did say that I know banks don’t have this goal, what I am asking is if there are any banks close to hitting that BB rung. I am not mentioning prestige or anything like that, I am just curious which banks would be the least surprising to take a spot as a BB in the future. There haven’t been many changes in a long time so I am curious if any banks would be classified as such in the future and if so, which ones.
EBs will never hit BB ‘rung’ because of what a BB means (full service)…
See, you're still missing the point: EBs and MMs are fundamentally different from full service banks, so they could never become a BB. It's like asking which of these football players at the combine will be the best player in the MLB.
Start here: what do you mean by BB rung and how would you envision a MM or EB achieving that rung.
You are a far more patient person than I am. I lost it at the Jefferies question lmao.
Wells, Jeff or RBC
Names coming to my Head are BNP or RBC. While both of them have their weaknesses in some regions. However, looking at their Corporate and Investment Bank they are working on a level where you would talk about a BB.
This is the right answer, add to that Jefferies and mayyybe HSBC (though they are more in retreat mode rather than expansion mode compared with BNP and Jefferies).
In terms of truly global platforms across debt, equity and advisory, banks like Wells are absolutely nowhere. Wells being "nearly BB" is purely a US mindset
Wells is the first to come to mind. They have the balance sheet to be BB status (very similar balance sheet to Citi).
With that said, I don't think they have global aspirations so by the classical BB terminology, I don't see them being a BB. After that, RBC comes to mind
the one that gives you an offer
Currently, the only situation I see in the market that would give rise to a new BB would be Wells Fargo acquiring a strong advisory firm similar to BofA/Merrill. But Wells definitely has 0 interest in that.
I'm sure they would if they could (they definitely have interest in growing out their IB under new management). But, probably won't happen because I don't see any decent Investment banks looking to be acquired
Wells Fargo
There are three that should technically be considered BB's if not for transaction size and some other items.
Jefferies, Wells Fargo, and RBC.
Jefferies is a independent full service investment bank. It has access to a large balance sheet, and consistently underwrites public offerings. It can also offer staple financing and has their own (albiet small) corporate banking side. It can act as a brokerage, and it can do most services (if not more with the inclusion of PCA and RX) that a BB can. The only thing stopping it is A. Its lack of an international presence, and B. Transaction sizes.
Wells Fargo & RBC have a very similar schtick. They have stronger corporate/consumer banking platforms, and also have smaller deal sizes compared to your DB/UBS types. They're less internationally known, but technically speaking they all have the same capacities as a BB would have. I think WSO misunderstands the categories that they put these firms into. Lots of folk here rank shops based on the ability to leave them. To be honest, I think we should do a reclassification of all shops, because as of right now there is way too much confusion. Also no one cares outside of finance. My mom thinks I give people mortgages and my dad thinks I sell stocks all day.
Silicon Valley bank
shit might get bought out and help another bigger bank. WF or RBC should sweep in
My bet is the UBS SF tech team that left for SVP goes to either Jeff SF or Moelis
Good point, on track to be just like Lehmen and Bear Sterns at the end
SVB is getting real close
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