JP Morgan extends investment banking dominance despite $13bn revenue dip

JPMorgan has stretched its lead at the top of the investment banking fee league tables, as the world’s biggest banks have seen revenue shrink by $13.2bn amid an ongoing deal-making drought.

The US investment banking giant grabbed 8.6 per cent of the dealmaking fee pool globally in the first three quarters of 2023, according to data provider Dealogic, up from 7.8 per cent at the same point last year. Second-placed Goldman Sachs took 7 per cent of investment banking revenue, down from 7.3 per cent in the first nine months of 2022, reports Financial News.

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The global investment banking fee pool has dropped 21 per cent so far this year, to $48.7bn following a difficult period for dealmaking in 2022. The $12.3bn earned in Europe, the Middle East and Africa this year is down by 24 per cent.

Goldman Sachs has retained its top spot in the M&A fee league tables, a position it has occupied for two decades, but JPMorgan has closed the gap. Goldman took a 10 per cent market share in the first nine months of 2023, down from 10.6 per cent last year, while JPMorgan’s share has jumped from 7.8 per cent to 9.7 per cent over the past year.

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Investment banks have battled against an ongoing deal drought that has forced many to make their deepest 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 was acquired by cross-town rival UBS in March, which is also expected to lead to more job losses as the two businesses integrate. UBS’s investment banking fees tumbled by 49 per cent during the first nine months of 2023, but the bank’s ranking now includes Credit Suisse revenue which has stalled since the takeover.

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Goldman’s 25 percent year-on-year decline in dealmaking fees is the steepest of any major Wall Street bank this year. JPMorgan’s 13.5 percent fall is less than the other top five Wall Street investment banks.