US banks have achieved a clean sweep of the top five places in global investment banking for the first time in at least six years after Deutsche Bank retreated to sixth place in the industry’s benchmark league table.
The data, compiled by industry monitor Coalition, includes revenue banks make from markets activities, such as equities and fixed income, as well as the traditional investment banking business of advising clients and helping them access finance.
Morgan Stanley’s rise to fifth place marks the first time that US banks have monopolised the league tables since Coalition began the series in 2011, and highlights the country’s dominance of investment banking since the financial crisis.
Deutsche’s slide to sixth place is not unexpected — the lender was traditionally in the world’s top three investment bank slots but lost that accolade last year as John Cryan, the then new chief executive, embarked on a tough restructuring.
Coalition’s data show that the bank lost most ground in fixed income, currencies and commodities trading, where Deutsche was a top three operator last year but fell to sixth in the first half of 2016. The bank also lost ground in equity capital markets.
Deutsche said: “The Coalition results reflect the strategic decisions we have taken to streamline our products, geographical footprint and client base. These decisions impacted first-half revenues but will make us more efficient and profitable. We remain the leading non-US investment bank globally and a top two player in Emea.”
Senior bankers privately admit that the internal turmoil at Deutsche in recent years has distracted bankers from their day-to-day business, but they say this is now fading.
They also say that while it will take time for the bank’s 2015-2020 transformation to bear fruit, they remain optimistic that the German lender can recover at least some of the ground it has lost.
However, the setbacks keep coming, including last week’s revelations that the US Department of Justice has put an initial price tag of $14bn on settling allegations that Deutsche mis-sold US mortgage bonds, which sent the bank’s shares down more than 7 per cent in just a few hours.
That kind of news hits Deutsche’s investment bank disproportionately because large clients worry about the counterparty risk of doing business with a bank that could see its own capital position deteriorate sharply on the back of a large fine.
Credit Suisse, the other large European investment bank that is in the middle of a significant restructuring, also suffered in the first half of the year, slipping from seventh to eighth, swapping places with Barclays.