When Euromoney examined recent investment banking revenue and bookrunner league tables, the phenomenon was striking. Colour-coding banks by geography, the rankings reveal a sea of US-red at the top and a puddle of European-blue at the bottom.
The main league tables in global investment banking – overall revenue and M&A, DCM and ECM revenue – are dominated by the same five US banks. When John Cryan at Deutsche Bank recently complained that banking sector regulation is purely for the benefit of the US, this is what he was talking about.
Of Dealogic’s 29 global league tables, JPMorgan comes top in 13 of them, second in four and third in two. It is fourth in one and fifth in two – dollar-denominated covered bonds and euro-denominated DCM. It takes 22 of the available 145 top-five spots in the tables.
Bank of America Merrill Lynch tops four of the league tables, comes second in five, third in six, fourth in three and fifth in three – taking 21 of the available slots. Goldman Sachs tops the global M&A revenue table and comes second in two, third in two, fourth in three and fifth in four. Citi does not top any of the league tables but comes second in four, third in five, fourth in five and fifth in six. Morgan Stanley comes second in two, third in three and fourth in two and fifth in one. This means that these five US banks have 83 of the 145 top-five spots: 57% of all top five league table positions.
Not only do US banks account for 86, or 59%, in total of ranked banks, the clear majority of those positions are towards the top left hand corner of the table. The league tables below are ordered on the basis of their importance in the bank capital markets business hierarchy: revenue is the top priority followed by market share in various sectors ranked by market volume and activity. The most important segments for global business are, therefore, towards the top left and the less important towards the bottom right.
The top left quartile of the table is almost entirely red. JPMorgan’s dominance of capital markets and M&A businesses is remarkable. But the other four dominant US players – Goldman Sachs, Morgan Stanley, BAML and Citi – are now very close to carving up all of the top five positions in the most important 10 league tables between them. Apart from the appearance of Credit Suisse and Barclays in the global loan revenue ranking, all of the top-five positions in the six investment banking revenue rankings featured were taken by US banks.
No league table is topped by a non-US bank until the euro-denominated rankings begin. The top two positions in euro-denominated SSA are topped by Barclays and HSBC, but even here JPMorgan appears, ranked number four. BAML and Citi are ranked three and four in euro-denominated investment grade corporate – beaten by BNP Paribas and Deutsche Bank.
European banks account for 51 slots in the table – 35% of the total. And those positions are predominantly towards the bottom of the table in league table rankings that are specific to the region. Excluding Wells Fargo, which appears in the loan and structured finance league tables, the 83 positions accounted for by US banks are taken by just five institutions. The 51 slots taken by Europeans are spread among 17 different banks. Barclays and HSBC take nine apiece but the rest are divided between a wide range of different institutions and geographies.
If the league table slots were weighted to reflect the importance of each ranking, the US dominance would be even more overwhelming. While they continue to labour under more punitive regulation and with legacy balance sheet problems, the Europeans, it seems, are fighting with one hand tied behind their back.
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