Universal banks set to dominate investment banking
Universal banks are likely to dominate investment banking league tables into the future, following the merger of some of the world's largest banking groups, according to recently compiled figures.
Bank of America, JP Morgan and Wachovia – if it merges with Morgan Stanley – will be the world’s three biggest generators of investment banking revenues, according to combined investment banking figures from Dealogic.
The $50bn (€35bn) takeover of Merrill Lynch by Bank of America on Monday created the world’s largest investment banking business, based on investment banking revenues for the year so far, pushing JP Morgan into second place, while a combined Morgan Stanley and Wachovia, if a deal is carried out, would be ranked third.
Barclays' acquisition of the North American businesses of Lehman Brothers will put the bank into sixth place globally by investment banking fees, behind Citigroup and Goldman Sachs, which would be the last remaining pure broker dealer left in the world’s top 10.
The turmoil across global financial markets has led to a wave of shock mergers and acquisitions that are altering the face of the investment banking market, with few betting against further surprises.
Morgan Stanley was yesterday reported to be in talks with US retail bank Wachovia over a potential merger. Goldman Sachs, which like Morgan Stanley has this week been forced to defend its business model, has also seen its shares lose about a quarter of their value.
In the US, Goldman Sachs would be ranked third for investment banking revenues based on Dealogic’s combined figures, while Barclays Capital would enter the top five for the first time following the Lehman Brothers acquisition, pushing Citigroup into sixth place.
-- Write to Harry Wilson at hwilson@efinancialnews.com
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