How Much Of The Debt Origination Industry Did Major U.S. Investment Banks Capture in Q4 and FY 2016?
The strong run witnessed by global debt capital markets over the first three quarters of the year came to an end in Q4, as companies around the globe raised less than $1.5 trillion in debt for the quarter – a 26% decline from the $2-billion figure for the previous quarter. [1] That said, this is still a strong showing by the industry considering the fact that average quarterly volumes have been $1.4 trillion over the last five years. Taken together with the $5.5 trillion in total debt originated over the first nine months of the year, the $7-trillion figure for full-year 2016 is the highest for the industry on record.
With the elevated deal volumes being driven by a spurt in investment-grade corporate debt issuances in the U.S., the five largest U.S. investment banks leveraged their strength in the country to gain a market share of almost 23% in Q4 2016.
Debt origination volumes for individual banks are taken from Thomson Reuters’ latest investment banking league tables. It should be noted that the largest debt capital market deals employ more than one investment bank, so the market share figures are not exclusive.
While Citigroup and Bank of America took the top two spots in the industry in terms of total global deal volume for Q4, JPMorgan took top honors with a market share of almost 6% for full-year 2016 thanks to its extremely strong performance over the first three quarters. Taken together, the five largest U.S. banks had a market share of just under 25% for 2016.
JPMorgan’s dominance in the debt origination industry is evident from the fact that it played a role in nearly 1,600 of the 21,000 deals that completed in 2016. Including Q4 2016, JPMorgan has held the #1 position in terms of debt origination deals completed in all but three quarters in the last five years – something that can be attributed to its strong grip across debt security classes in the U.S. and EMEA (Europe, Middle East and Africa) regions.
You can see how changes in JPMorgan’s share of the debt origination industry impact our price estimate for the bank’s shares by modifying the chart below.
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- Global Debt Capital Markets Q4 2016, Thomson Reuters Deals Intelligence [↩]