Companies in this industry underwrite, originate and maintain markets for clients issuing securities; they may also offer advisory services, help facilitate corporate mergers and other deals, or act as principals in buying or selling securities on a spread. Major companies include Goldman Sachs, Merrill Lynch, and Morgan Stanley (all based in the US), as well as Barclays (UK), Deutsche Bank (Germany), Macquarie Group (Australia), Nomura (Japan), and Credit Suisse (Switzerland).
Worldwide revenue for investment banks is about $230 billion, according to Morgan Stanley. The US is the main driver of investment banking profits - accounting for about half of the world's fee revenue, according to Morgan Stanley. However, European and Asian banks also are key players within the industry. Overall, the investment banking industry is in stasis, showing little to no global revenue growth since 2005/2006, according to estimates from JP Morgan.
The US investment banking industry includes about 3,000 companies with combined annual revenue of about $110 billion. After peaking in 2013, US investment banking revenue fell for two consecutive years in 2014 and 2015, the first year-over-year declines since the late-2000s recession, according to data from Dealogic.
Demand is driven by economic activity that results in company mergers, acquisitions, or public financing. The profitability of an investment bank depends on its ability to accurately assess both the value of a business transaction and the readiness of the market to buy the attendant debt or equity....