The world’s top five investment banks, all American, earned more than $27 billion in fees in 2022, according to data acquired by financial website Finbold. JP Morgan led the group with $6.92 billion.
Goldman Sachs earned $6.5 billion; Bank of America Securities, $5.52 billion; Morgan Stanley, $4.61 billion; and Citibank, $3.96 billion. Mergers and acquisitions accounted for 37% of JP Morgan’s earnings. Loans tallied 31%; bonds, 22%; and equity, 10%, according to the data.
Barclay’s was the highest-ranking non-U.S. bank, earning $2.83 billion in fees in 2022.
The fees were generated during a time of high volatility and disruptive interest rate hikes. The banks’ expenses likely surged with the soaring inflation, slowdown in deal-making, geopolitical tensions, and possible job cuts, according to Finbold.
JP Morgan’s strong performance may be linked to its large size, extensive network, and robust reputation. In addition, “As one of the largest investment banks in the world, JP Morgan has a broad reach and significant resources, allowing it to offer clients a broad range of services and compete effectively for the most lucrative deals.”
U.S. banks have out-earned their European counterparts, with the gap appearing to widen, and U.S. investment banking has beaten European counterparts on their turf. According to Finbold, “the fees earned highlight the dominance of U.S- based investment banks on the global scene. This element can be attributed to recent regulatory impositions that have made it challenging for lenders to expand. However, U.S. investment banks have a global reach, even in Europe.”
Overall, American banks have exhibited resilience backed by factors such as constant investment in technology and the capital market business.