Investment Banks in 10 years - Ranking
Hi guys!
How do you think the landscape will change in the next couple of years? Will the Bulge Bracket be reduced to the US banks?
Will the Europeans merge?
How will the EBs be positioned? Which might fall from glory (as Greenhill did) as a result of the departure of founding partners? (thinking of Ken Moelis or Roger Altman)
Will the Balance Sheet Banks (JPM/BAML/Citi) continue to grow their IBD businesses?
JPM seems likely to dethrone at least MS. Maybe one of the other two as well once financing will become more scarce?
Which banks will be the winners/losers of the next financial crisis?
DB may be the next Lehman Bros if the next crisis hits hard.
I doubt that DB will actually go down. Maybe leave IB business or have its IB business sold. But it's too important for the German economy too simply fail. Who would be a good fit to pick up the spare parts? UBS? BNP Paribas? Commerzbank Merger?
Fair point but I think people can pick up the slack. As you mentioned, a CB merger or UBS/CS
Probably because everyone one here is 15 or younger, but not every recession is a crisis. 2008 was an anomaly not the norm.
Sure. But even recessions have winners and losers. Especially in M&A where you will see the emergence/dominance of certain transaction types and industry consolidation trends push firms towards the top.
More commenting on the premise of this thread than what you're saying, which I agree with.
2008 was anomalous compared to the average recession, but fuck ups of that size do tend to have semi-cyclical patterns; 2008 mortgage bubble, 2001 dot-com bubble, 1980s savings and loan crash, 1970s energy crisis. They do happen every so often.
The most profitable banks tend to be more profitable because of leverage so recessions kills them. Lehman is a great example
So DB
Not sure if I'd compare DB to Lehman on a leverage basis... just has been dealing with heightened funding costs which has been eating into profits from their historically premiere debt business. Think DB's pretty well-capitalized nowadays and just needs to work on fixing their business model to return to profitability
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I still think the US investment banks will further cement their dominance and further gain market share. Putting league tables aside, I think the general trend will remain with MS leading equities, JPM/Citi leading fixed income and GS leading M&A
The bigger surprise will really come from the European investment banks where there is a lot more turnmoil, and I personally think Barclays will be the biggest standout, mainly because they have the strongest US franchise out of all the European IBs - the investment banking division of Barclays is really more a US-based franchise (the Lehman franchise) than a European one. I'm a big fan of Jes Staley's strategy of concentrating in the US / UK and so far they have been executing tremendously well - if this progress continues, I would not be surprised if Barclays eventually dethrones DB as the "investment banking champion of Europe" going forward
Just my 2 cents, l could be totally wrong
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CS seems to have a stronger franchise atm, though. I really don't like Jes, especially with the KKR debacle
Surprised no has mentioned anything about prospects in Asia, considering the region is becoming increasingly important.
I wouldn't have any specific perspectives on this but have read that CS for example are pushing quite aggressively into APAC with some decent results. Also be interesting to see whether this 1MDB debacle has any effect on GS's standing in the region and how more regional banks (DBS, Nomura etc.) are performing. Anyone with any insight?
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What about european EBs? I think Rothschild/Lazard in Europe will be able to compete with the biggest M&A players as they already do.
Would love to hear more input as well. IMO there will be an additional EB that will really compete will Lazard on a global level. I think Evercore is better positioned to grow in both the US and EU than Rothschild which will most likely remain a primarily European powerhouse
Also, would like to hear about RBC which has grown a lot over the past decade and continues to add bankers in US and Europe.
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