JPMorgan, Bank of America Benefit From Upbeat Debt Capital Markets

by Trefis Team
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With global debt origination volumes edging higher from the already elevated levels seen in the first quarter of 2017, the five largest U.S investment banks roped in a record $3.94 billion in debt origination fees for Q2 2017 – comfortably ahead of the previous highest level of $3.83 billion seen in Q4 2012. Additionally, this was also the first time since early 2013 that JPMorgan and Bank of America both reported fees in excess of $1.8 billion each for the first half of the year.

Debt origination activity in the U.S. has been extremely strong over the first two quarters of the year – something that can be attributed to the Fed’s rate hikes, as U.S. companies have sought to raise fresh debt capital before additional rate hikes by the Fed. Debt origination fees for these five banks increased 8% from the figure a year ago, and was also 5% higher than the figure for the previous quarter.

* Total debt origination fees for the industry include fees from syndicated loans

Total debt origination fees for the industry are taken from Thomson Reuters’ latest investment banking league tables. Figures for individual banks are as reported in their quarterly results.

The global debt origination industry is dominated by JPMorgan, Citigroup and Bank of America, along with U.K.-based banking giant Barclays. These four banks usually capture the largest share of the market in a given quarter, and also pocket the most fees. While Goldman Sachs and Morgan Stanley have reported similar market shares each quarter in terms of deal size, Goldman generally reports higher revenue figures as it plays key roles in some of the largest deals completed over a quarter.

JPMorgan displaced Bank of America from the top spot in terms of total debt origination fees after the latter held the position for two consecutive quarters. Notably, Bank of America pocketed more fees in the industry than any other global investment bank in five of the last seven quarters (except Q3 2016 and Q2 2017). You can see how changes to Bank of America’s debt origination fees affects our estimates for the diversified banking giant by modifying the chart below.

See the links below for more information and analysis about the 5 largest U.S. investment banks:

See full Trefis analysis for Goldman SachsJPMorganMorgan StanleyBank of America | Citigroup

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