As a financial services company, Investment banking acts as an intermediary in large and complex financial transactions. It’s downpour of banking which largely concentrates on equity financing for transnational and local businesses, individuals, and even governments. These assorted finance statutes can be in the form of equity/debt IPO, bonds offering, consolidations and accessions, portfolio surveillance, etc.
According to discoveries and investment administrators analyses, there are about 8 top bank investment banks in the united states, and in this article, the 3 of them will be discussed in no particular ranking order and factors specific to the investment banking division are encompassed, based on accessible data, as of Jan. 2020.
The full-service investment banks offer a wide range of services that include underwriting, M&A, sales and trading, equity research, asset management, commercial banking, and retail banking
- Goldman Sachs (GS): One of the aged banking firms founded in 1869 and headquartered in New York City, GS offers a vast expanse of services spread across four divisions—investment banking, institutional client services, investing and lending, and investment management. Goldman Sachs documented net revenues of $36.62 billion for the fiscal year 2018, of which the investment banking division contributed $7.86 billion. The revenue induced in the investment banking division was the highest among all divisions. Earnings per share were $25.27.
2. JP Morgan Chase (JPM): One of the hugest investment banks, JPM Chase reported net revenues of $109 billion for FY 2018, of which investment banking revenue contributed $36.4 billion. EPS breathed $9. The firm has $2.62 trillion in assets and $256 billion in stockholders’ equity and regulates in 60 nations with more than 256,000 employees with a diversified set of services.2 Apart from investment banking, it also utilizes in consumer and community banking, commercial banking, asset and wealth oversight, and corporate.
Unlike other banks, investment banks get ranked almost every decade, this means that one supersedes the other with functions, objectives, and purpose, and these features thereby cause interoperability.
3. Barclays (BCS): Founded in 1896, London, U.K.-based investment bank hit the headlines for statements about the mechanism of London interbank ratios and news about an enormous number of job cuts globally in 2013. Financed by a strong workforce of 86,800 employees globally, the 2018 annual report indicates a total income of £21.1 billion of which the investment banking sector bestowed to £9.8 billion. Overall, EPS was £9.2.3.
4. Morgan Stanley (MS): Founded in 1935 and headquartered in New York USA, the global firm employs 60,348 employees dissipate across numerous countries. It reported net revenue of $40.1 billion in FY 2018, of which the investment banking segment contributed $6.1 billion, heightening from $5.5 billion a year ago. EPS was $4.73.5 Apart from the usual wealth raising, M&A, corporate restructuring services, the firm also offers assorted services like prime brokerage, custodian, concession and clearing, etc.
5. Deutsche Bank (DB): Based in Germany and listed on the New York stock exchange, Deutsche Bank reported net revenue of EUR 25.316 billion, down by 4.3% year-on-year.6 One of the largest financial services firms of Europe, DB specializes in cross-border payments, international trade financing, cash management, card services, mortgage, insurance, and the usual investment banking stream. Deutsche has a widespread existence with projects in 71 countries.
6. Citigroup (C): Tracing its roots back to the origin of Citibank in 1812, Citi has 204,000 employees with business and operations in 160 countries. Of the total revenues of $72.9 billion reported for 2018, contributions from investment banking fell 7% from the preliminary year to $5.01 billion. EPS was $6.68.7 The bank has a strong presence in investment banking, investment management, private banking, and card processing streams.
7. Credit Suisse (DHY): With a net income of CHF 20.92 billion and EPS of 0.77 in 2018, the Zurich Switzerland-based Credit Suisse group established in 1856 today employs 45,680 workers across the globe in over 50 countries.8 Apart from the regular investment banking business, it also has a presence in taxation and advisory, structural lending, real estate leasing, and investment research services.
Now, Along with other investment banking,
8. Barclays (BCS) which Founded in 1896, London, U.K based investment bank also has a vital existence in retail and commercial banking and card processing business but it was not founded in the US but is ranked one of the best investment banks all over the world.
However, looking at past recreations of investment banks, there can be several criteria, the effortless ones to look at are the revenue numbers, global reach, employee headcount, income, and so it is for every banking system.
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9. Bank of America Corporation (BAC): Bank of America Corporation is an American multinational banking and financial services company that offers a wide array of banking services including investment banking, mortgage, trading, brokerage, and card services. Operating in 40 countries across the globe with a total net income of $28.1 billion in FY 2018, the investment banking division contributed $8.1 billion. The overall EPS was $2.61.
How an Investment Bank Works
Investment banks play the following roles as adumbrated below.
- Financial Advisors: investment bank provide strategic advice on a variety of financial matters to large institutional investors
2. Mergers and Acquisitions: They help in Facilitating mergers and acquisitions
3. The Intermediary Role: Investment banks work as intermediaries between a corporation and the financial markets by helping corporations issue shares of stock in an IPO or an additional stock offering
4. Research: Research maintains an investment bank’s institutional knowledge on credit research, fixed income research, macroeconomic research, and quantitative analysis, all of which are used internally and externally to advise clients.
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Who are Investment bankers Clients?
1. Institutions – Investment banks perform great role in helping and working with institutional investors who manage other people’s money to help them trade securities and provide research.
2. Government– They also work with governments to raise money, trade securities, and buy or sell crown corporations.
3. Corporations: Bankers work with both private and public companies to help them go public (IPO), raise additional capital, grow their businesses, make acquisitions, sell business units, and provide research for them and general corporate finance advice.
In conclusion, many of these businesses and investments have little to no controversy as long as the investment is made the right way with the right channels.