Largest U.S. Banks Haven’t Been Able To Benefit Much From The Ongoing Debt Origination Boom

by Trefis Team
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An increase in U.S. corporate debt origination, coupled with a spike in debt capital market offerings in the growing economies of India, Mexico, Russia and Brazil, helped global debt origination volumes for Q3 2017 cross the $2 trillion mark for only the second time in history (after Q3 2016). This marks a steady improvement from a figure of below $1.5 trillion for Q4 2016. However, the five largest U.S. investment banks couldn’t make the most of this rapid growth, as their combined deal size fell from $520 billion in Q1 2017, and $498 billion in Q2, to $478 billion in Q3.

Debt origination volumes for individual banks were taken from Thomson Reuters’ investment banking league tables for the last five quarters. The table below captures the respective market shares for each of these banks over this period. The green-to-yellow shading for figures in a quarter should help compare the relative standings of these 5 banking giants in a particular quarter.

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.

Although there was a noticeable recovery in U.S. debt origination activity, growth in developing nations has out-paced that in the U.S. over recent quarters. This has resulted in a reduction in market share for the largest U.S. banks from almost 30% in the first quarter to 23% now, as their operations are primarily focused on the U.S. and Europe. This is evident in particular from the fact that JPMorgan lost its #1 position for two consecutive periods to Citigroup for the first time in several years, as the latter’s more geographically diversified business model helped it garner a stronger share of the international debt market.

The chart below captures JPMorgan’s share of the global debt origination market. You can see how changes to this metric affects our price estimate for the banking giant by modifying our forecast here.

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

View Interactive Institutional Research (Powered by Trefis):
Global Large CapU.S. Mid & Small CapEuropean Large & Mid Cap
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