JPMorgan Reclaims Top Spot In Global Debt Capital Markets In Q4 Despite Subdued Activity Levels

January 5th, 2018 by Trefis Team
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Global debt capital markets ran out of steam over the last quarter of 2017, as companies around the globe raised just $1.6 trillion in debt for the quarter – down from almost $2.1 trillion in the previous quarter. This was largely expected, as the fourth quarter of the year is seasonally a slow period for the industry, and also because the figure for Q3 (the best quarter ever for the industry) was boosted substantially by the flurry of debt origination activity in the U.S. as companies rushed to raise debt capital before the Fed’s rate hikes pushes interest rates higher. In fact, U.S. investment-grade corporate debt issuances were at a record high in Q3 2017.

JPMorgan ended the year on a high note as it recaptured the top spot in the global debt origination industry from Citigroup, who earned the top honor for Q2 2017 and Q3 2017. The combined market share of the five largest U.S. banks improved to almost 27% in Q4 from 23% in Q3 as a result of subdued activity levels in emerging markets such as India, Brazil and Russia, where these banks have yet to create a substantial foothold.

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Debt origination volumes for individual banks are taken from Thomson Reuters’ latest investment banking league tables. It should be noted that the largest debt capital market deals employ more than one investment bank, and the market share figures here factor in the proportion of the total proceeds generated by a particular bank.

JPMorgan continues to dominate the global debt capital markets, with the largest U.S. bank capturing the #1 position in terms of total debt origination deals completed in all but five quarters since early 2012 (with Q3’15, Q4’15, Q4’16, Q2’17 and Q3’17 being the exceptions). JPMorgan emerged stronger in the U.S. and Europe after the economic downturn thanks to its acquisition of Bear Stearns, and this has helped it consolidate its share of the global industry. That said, Citigroup has made the most of its large presence in emerging markets over recent quarters,  and it is keen on regaining the ground it lost in the U.S. and Europe to JPMorgan in the wake of the downturn.

You can see how changes in JPMorgan’s share of the debt origination industry impact our $98 price estimate for the bank’s shares by making changes to 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 Sachs | JPMorgan | Morgan Stanley | Bank of America | Citigroup

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