What Proportion Of Revenues For The 5 Largest U.S. Investment Banks Came From Trading Securities In 2016?
Among all major U.S. banks, Goldman Sachs' business model relies the most on trading revenues, with its fixed income, currencies, commodities (FICC) and equity trading desks together roping in more than 47% of its total revenues for 2016. The proportion is a much lower 16% for Bank of America, which - like peers Citigroup and JPMorgan - has a considerably diversified business model.
Notably, Goldman Sachs is the only bank in this list which has left its overall business model relatively unchanged since the start of this century, with more than 80% of its revenues coming from securities trading, advisory and underwriting, and principal investing. Morgan Stanley stepped away from volatile trading industry by shrinking its FICC trading desk and focusing on its wealth management capabilities after the acquisition of Smith Barney from Citigroup. While Citigroup had to contend with smaller trading operations in the wake of heavy losses during the economic downturn, JPMorgan and Bank of America emerged from the downturn with a larger presence in the industry thanks to their acquisitions of Bear Stearns and Merrill Lynch respectively.
With Goldman betting on steady growth in the global FICC trading industry, and with stricter regulations reining in its principal investment business over the years, we believe that securities trading could end up contributing more than 50% of the premier investment bank's top line in the near future.
See the links below for more information and analysis about the 5 largest U.S. investment banks:
- How Have Securities Trading Revenues At The 5 Largest U.S. Banks Changed In The Last 5 Years?
- How Much Did The 5 Largest U.S. Investment Banks Make Through FICC Trading Activities In 2016?
- How Much Did The 5 Largest U.S. Investment Banks Make Through Equity Trading Activities In 2016?
- How Much In M&A Advisory Fees Did The 5 Largest U.S. Investment Banks Generate In 2016?
- How Much In Equity Underwriting Fees Did The 5 Largest U.S. Investment Banks Generate In 2016?
- How Much In Debt Origination Fees Did The 5 Largest U.S. Investment Banks Generate In 2016?
- How Much In Total Advisory & Underwriting Fees Did The 5 Largest U.S. Banks Earn In 2016?
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