Which Firms Have Had the Biggest Fall-Off Since 2008?
Hi everyone,
The 2008 financial crisis was a defining moment for investment banking. While some firms adapted and even thrived, others experienced a significant decline in influence, market share, or profitability. Here are a few investment banks that still exist but have seen noticeable fall-offs since the crisis:
1. NatWest (formerly RBS)
RBS had ambitious plans for its investment banking division, especially following its acquisition of ABN AMRO in 2007. This turned out to be a catastrophic decision when the financial crisis hit, forcing RBS to take a £45 billion bailout, the largest in UK history. Since then, the bank has rebranded as NatWest Group and scaled back its investment banking operations significantly. It now focuses primarily on domestic retail and commercial banking, having abandoned its pre-crisis ambitions in investment banking.
2. Deutsche Bank
Deutsche Bank was a global powerhouse in investment banking before 2008, particularly in fixed income. However, it faced major challenges in the aftermath of the crisis, including regulatory fines, scandals like Libor-rigging, and poor leadership decisions. Despite years of restructuring, its investment banking division has struggled to compete with dominant players such as Goldman Sachs and JPMorgan. Although it remains active, its influence has declined significantly.
3. Barclays
Barclays appeared poised to become a major player after acquiring Lehman Brothers’ North American operations during the crisis. However, it struggled to integrate these assets effectively and faced significant regulatory issues, including fines related to Libor-rigging (actually met Jerry del Missier recently). While it continues to compete in M&A and capital markets, Barclays has lost ground to US banks and no longer holds the prominence it once aimed for on the global stage.
4. Citigroup
Citi was a dominant player in investment banking before the financial crisis but was among the hardest-hit banks during 2008, requiring $45 billion in bailout funds. It sold off major assets, such as Smith Barney, and scaled back its riskier operations. While it still operates in M&A and capital markets, it has struggled to regain its former prominence, particularly when compared to peers like JPMorgan and Morgan Stanley.
Discussion Points:
- What do you think caused these declines? Was it poor management, regulatory pressure, or broader market dynamics?
- Are there other investment banks you would include on this list?
Looking forward to hearing your thoughts and starting a discussion about how the investment banking landscape has evolved since 2008.
Based on the most helpful WSO content, the firms that have experienced significant declines since 2008 align closely with your list. Here's a breakdown of the key players and additional insights:
Deutsche Bank: As highlighted in WSO threads, Deutsche Bank's fall from grace has been well-documented. Regulatory fines, scandals, and leadership missteps have eroded its market share. It has been noted that Deutsche Bank is now often avoided, with its US business significantly diminished.
Barclays: While Barclays initially seemed to capitalize on the Lehman acquisition, WSO discussions suggest that its IB division has struggled to maintain profitability and relevance. Activist investor pressures and questions about its long-term commitment to investment banking have further clouded its outlook.
Credit Suisse (CS): WSO threads frequently mention CS as a major loser in the post-2008 era. Once a top-tier player, it has faced declining market share and challenges in its LevFin and broader IB operations. Speculation about its retreat from investment banking has been a recurring theme.
UBS: UBS has largely exited its US investment banking business, as noted in WSO discussions. Its focus has shifted away from traditional IB activities, and it no longer competes at the level it once did.
Citigroup: Citi's decline is also well-documented in WSO content. While it remains active in M&A and capital markets, it has not regained its pre-crisis dominance, especially compared to JPMorgan and Goldman Sachs.
Greenhill: Once a prominent elite boutique (EB), Greenhill has struggled to maintain its position. WSO threads highlight its diminished status, with some even questioning its classification as an EB.
Discussion Points:
For further insights, you can explore the detailed discussions on WSO forums, such as the "2020s Investment Banking Outlook" thread (url: https://www.wallstreetoasis.com/forum/investment-banking/2020s-investme…).
Sources: 2020s Investment Banking Outlook, Why so serious?, How bad are things going to get?, Investment Banks in 10 years - Ranking, 2020s Investment Banking Outlook
Lehman Brothers
clearly not as illustrious as a starting point but SocGen probably worthy of a mention here too in terms of decline. Kerviel incident in '08 obviously didn't help here
Where is Credit Suisse?
I'd say Lehman, Merrill Lynch, and Bear Stearns are up there
It's probably best to specify that I mean firms that are still around.
ML is still #4 on league tables (through it's acquirer BofA)
While not related to GFC, but Greenhill fell off a lot since its prime in the 00s/10s. Pretty big fall from being the top EB at the time (maybe alongside BX)
Definitely. When I was recruiting for SA around 16/17 they were still considered a good EB, probably in line with MOE or LAZ, but over the last couple of years their management made some terrible decisions
UBS / CS(FB) as well. A lesser-mentioned one: CIBC. They broke into the top 10 league tables in '06 I believe, so kind of like where RBC is today, had exposure to subprime paper and then almost completely wiped out its US presence and went back to being one of the smaller Canadian domestic-focused banks inside of 3 years.
Not putting CS here? Also UBS, the former home of Ken Moelis and the original Moelis founding core as well as Blair Effron and the og founding team of Centerview is a bigger fall off than Barclays or Citi which are still mid-tier BB's with deal flow whilst UBS is struggling heavily in North America M&A right now.
Gleacher
Why has no one mentioned Dresdner Kleinwort (formerly the Investment Banking division of Dresdner Bank)?
After the acquisition of Wasserstein Perella in 2001, the firm operated under the name Dresdner Kleinwort Wasserstein and effectively competed with bulge bracket banks in the league tables.
Before 2008, Dresdner Bank had plans for a mega merger with Deutsche Bank that aimed to create the largest bank in the world. However, these plans quickly fell through and did not materialize.
Following its takeover of Dresdner Bank in 2008, Commerzbank became the successor institution and has primarily transformed into a regional player. What remains of Dresdner Kleinwort now operates only in German-speaking middle market investment banking as the Capital Markets & Advisory Division of Commerzbank.
Aperiam veritatis aperiam asperiores sequi sed. Exercitationem aut et similique nihil et neque. Aperiam quos alias et qui nulla.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...