JPMorgan Chase, Bank of America Lead Investment Banks’ Performance



Investment banking performance

In 2Q17, US commercial banks (XLF) posted upbeat performance in investment banking due to fundraising and strategic transactions. JPMorgan Chase (JPM) posted net revenues of ~$8.9 billion for its Corporate and Investment Bank segment in 2Q17, compared to ~$9.2 billion in 2Q16 and ~$9.5 billion in 1Q17.

JPM maintained its first-place rank in global investment banking fees in 2Q17, mostly due to its 17% growth in banking revenues to ~$3.1 billion. JPM’s Investment Bank division has successfully penetrated the global strategic transaction arena, with a particular focus on the Americas, Europe, China, and India. The bank has demonstrated strength in the areas of equity, debt underwriting, and advisory services.

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Industry-wide trend

In 2Q17, Bank of America (BAC) was ranked third globally in investment banking with a 6.4% market share. The bank’s non-interest income business saw continued strength in advisory fees and Treasury-related income. These gains were partially offset by a decline in revenues for hedging activities.

Citigroup’s (C) Institutional Clients Group posted ~$4.8 billion in revenues, aided by higher growth in investment banking, private banks, and corporate lending. The bank’s investment banking revenues rose as liquidity and fundraising drove its global transactions.

Wells Fargo (WFC) and Goldman Sachs (GS) also witnessed strong growth in their advisory services divisions, fueled by transactions in the Americas, Europe, and Asia.

In 2H17, transactional activity is expected to see marginal or no growth. This trend is mostly mainly due to stable markets, high valuations, high cash flow generation, and lower M&A activity from China due to capital outflows.


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