How Much In Total Advisory & Underwriting Fees Did The 5 Largest U.S. Banks Earn In 2016?

+12.39%
Upside
59.27
Market
66.61
Trefis
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Citigroup

The 5 largest U.S investment banks pocketed almost $27 billion in total advisory and underwriting fees in 2016 – a little over 32% of the total figure for the industry.

IB_QA_US_IBFees_FY16
Total investment banking fees for the industry are taken from Thomson Reuters’ latest investment banking league tables, and includes fees from M&A advisory, equity underwriting, debt origination and loan syndication activities.

The chart below captures the total investment banking fees reported by the five largest U.S. investment banks since 2012. The green-to-red shading for figures along a row show the variations in these revenues for a particular bank over this period.

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IB_QA_US_IBFeesChange_FY16

Notably, these five banks capture ~33% of all global investment banking fees in any given year. Total fees were considerably elevated in 2014 and 2015 thanks to strong M&A activity accompanied by a jump in equity underwriting activity. Equity underwriting fell considerably in 2016 around the globe, and although this was mitigated to an extent by an increase in Chinese debt origination fees, the largest U.S. banks saw their market share shrink due to their weaker presence in China.

From being the largest player globally in terms of  total advisory and underwriting fees prior to the economic downturn of 2008, Citigroup has steadily seen its market share fall to the fifth position among the U.S. banks over the years. This was because Citigroup’s debilitating losses from its investment banking activities (especially from debt origination) during the downturn forced the bank to slash its presence in the industry. That said, Citigroup remains a significant player in key emerging economies, where the bank has been able to leverage its local retail banking presence to compete better with its peers as well as local competitors.

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

Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment/ ask questions on the comment section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to the full Trefis analysis for Goldman SachsJPMorganMorgan StanleyBank of America | Citigroup

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