Goldman’s Strong M&A Performance In Q3 Helps Total Advisory Fees For Largest U.S. Banks Reach $2.7 Billion

by Trefis Team
Goldman Sachs
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The five largest U.S investment banks reported almost $2.7 billion in M&A advisory fees in Q3 2017, with Goldman contributing more than one-third of that figure. Notably, Q3 2017 was one of the best quarter in terms of advisory fees for these banks, as they have reported more revenues in a quarter on only two other occasions since 2008 (Q1 2015 and Q4 2015).

Goldman’s M&A advisory unit contributes about 16% of our $245 estimate for the premier investment bank’s shares.

Total advisory fees for these banks in Q3 were nearly 19% higher than the figure for the year-ago period, and were also 6% higher than the figure for the previous quarter. There has been a steady improvement in these fees since the downturn, though, as the average quarterly M&A advisory fees for these five banks climbed from an average figure of $1.8 billion over 2008-14 to almost $2.5 billion over 2015-16.

The table details the trend in M&A advisory 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 capture around 30% of the global M&A advisory wallet share for any given quarter – highlighting their strong grip over the highly competitive industry.

Total M&A advisory fees for the industry are taken from Thomson Reuters’ latest investment banking league tables. Figures for individual banks are reported as a part of their quarterly results.

Goldman routinely captures the largest share of the global M&A industry – something that has helped the bank report much higher fee revenues than its peers in nearly every single quarter over the years. Goldman’s average M&A advisory fee figure for the last 11 quarters has been over $800 million, while the average figure for Morgan Stanley and JPMorgan has been closer to $500 million. In fact, Goldman has reported more M&A advisory fees than any other investment bank in the world for each of the last 26 quarters. The bank achieves this primarily due to its involvement in key roles for many of the largest deals that close over a period.

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

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

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