How Much In Debt Origination Fees Did The Largest U.S. Investment Banks Earn In Q1?

The five largest U.S investment banks pocketed just over $3.6 billion in debt origination fees in Q1 2018 – well below the $3.9 billion they made in the previous quarter and also lower than the $3.8 billion figure a year ago. While the first quarter of the year is seasonally the best period for global debt capital markets, the lower fees were largely expected, as many U.S. companies accelerated their capital raising plans over 2016-2017 in light of the Fed’s ongoing rate hike process. As more companies rushed to issue debt securities before interest rates rose further, there was a sizable reduction in the deal pipeline for the quarter.

We capture the trends in debt origination fees for each of these investment banks over recent years in detail as a part of our interactive model, while also forecasting how this revenue is likely to change in 2018. We highlight key observations related to their debt origination fees below.

The table below details the trend in debt origination fees for each of these banks in the last five quarters. The green-to-yellow shading along a column highlights the relative performance of each bank in any given quarter. These banks usually capture around 35% of the global debt capital market wallet share for any given quarter.

Total debt origination fees for the industry are taken from Thomson Reuters’ latest investment banking league tables, and include fees from syndicated loans. Figures for individual banks are reported as a part of their quarterly results.

Bank of America regained the top spot in the list after being displaced by JPMorgan in Q4 2017. While Bank of America and JPMorgan are the two biggest players in the global debt capital market (with one of these banks capturing the #1 spot in terms of total debt origination fees every single quarter since the economic downturn), Goldman has seen a sharp improvement in its fortunes over the last two quarters thanks to its increased focus on the industry.

Details about how changes to Debt Origination Fees (and other Investment Banking Fees) affect the share price of these banks can be found in our interactive model for Goldman Sachs | JPMorgan | Morgan Stanley | Bank of America | Citigroup

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