Now that your business is beginning to take space, you are probably looking for an investment bank to help you better manage your funds and make few profit in the process.
When you think of a bank, you probably think of a place that takes deposits, maintains checking and savings accounts, and offers loans like mortgages. But what is an investment bank?
Investment banking is a stream of banking that primarily focuses on capital financing for global and local businesses, individuals and even governments. These diversified finance requirements can be in the form of equity/debt IPO, bonds offering, mergers and acquisitions, portfolio management, etc.
The best investment banks are large financial institutions that play an important role in facilitating money moving around the economy. Initial public offerings, for example, are an opportunity for investors to help a company raise money while also getting a stake in the business.
You might be wondering how these investment banks are ranked. Well, while there can be several criteria, the easy ones to look at are the revenue numbers, global reach, employee headcount, income, etc.
Read Also: How to create a Business Plan
If you are looking for advice and suggestions on which of these investment banks to choose, then this article is for you. Please read on.
Goldman Sachs
One of the oldest banking firms founded in 1869 and headquartered in New York City, GS offers a wide range of services spread across four divisions—investment banking, institutional client services, investing and lending and investment management.
Goldman Sachs reported net revenues of $36.62 billion for fiscal year 2018, of which investment banking division contributed $7.86 billion. The revenue generated in the investment banking division was the highest among all divisions. Earnings per share were $25.27.
J.P. Morgan Chase
J.P. Morgan Chase is one of the largest financial institutions in the world. This massive company is made up primarily of two divisions. The Chase side of the company is a business and commercial bank. The J.P. Morgan brand is focused more on investments, including investment banking. The company holds a mind-boggling $2.5 trillion in assets.
On its website, J.P. Morgan puts a big focus on mergers and acquisitions, a lucrative investment banking service. Other offerings include advisory services, capital raising, and risk management.
On its website, J.P. Morgan puts a big focus on mergers and acquisitions, a lucrative investment banking service. Other offerings include advisory services, capital raising, and risk management.
Like most large banks, J.P. Morgan Chase came together from a series of mergers and acquisitions of its own. Predecessors include Chase Manhattan Bank, Bank One, Bear Stearns, and Washington Mutual.
The oldest predecessor was the third oldest bank in the country and 31st oldest in the world. It was founded by Aaron Burr. Yes, the same Aaron Burr of Hamilton infamy.
Barclays
Founded in 1896, London, U.K. based investment bank hit the headlines for allegations about the rigging of London interbank rates and news about a huge number of job cuts globally in 2013.
Backed by a strong workforce of 86,800 employees globally, the 2018 annual report indicates a total income of £21,136 million of which the investment banking segment contributed to £9,753 million. Overall, EPS was £9.2.3 Along with investment banking, it has a strong presence in retail and commercial banking and card processing business.
Morgan Stanley
Founded in 1935 and headquartered in New York USA, the global firm employs 60,348 employees spread across multiple countries. It reported a net revenue of $40.1 billion in FY 2018, of which the investment banking segment contributed $6.1 billion, increasing from $5.5 billion a year ago.
EPS was $4.73.5 Apart from the usual capital raising, M&A, corporate restructuring services, the firm also offers diversified services like prime brokerage, custodian, settlement and clearing, etc.
Bank of America Corporation
The investment banking arm of Bank of America, this investment bank came about through a long chain of mergers, most recently Bank of America’s acquisition of major investment bank Merrill Lynch during the financial crisis of 2008.
It operates around the world with major centers in Hong Kong, London, and New York. Bank of America is the second biggest US bank with $2.3 trillion in assets.
Bank of America Merrill Lynch investment banking offerings include mergers and acquisitions, debt and equity offerings, lending, trading, risk management, and other services. The old Merrill Lynch wealth advising division lives on as Merrill Lynch, also owned by Bank of America but with separate operations.
Like other investment banks, the advisory services of Bank of America Merrill Lynch are important for companies looking to raise funds in public markets. When going public, investment bankers help determine the initial share price while balancing liquidity and demand. They also help companies sell bonds, another major option to raise capital.
Deutsche Bank
Based in Frankfurt, Deutsche Bank holds about €1.5 trillion in assets, making it one of the four biggest investment banks in Europe and the largest in the Eurozone. Founded in 1870, Deutsche Bank is a full-service financial institution with a powerful and influential investment banking division.
Deutsche Bank is a major operator in the United States and around the world and made a noteworthy contribution to the 2008 financial crisis through its work in the mortgage securities market. That led to a $7.2 billion fine in 2017.
The bank has dealt with a series of controversies over the last few years, including doing business with sanctioned countries, money laundering, and the 2015 LIBOR scandal. It is currently wrapped up in the Mueller investigation of President Donald Trump due to its strong lending relationship with Trump’s businesses.
Read Also: What to do when your Business Fails
However, much of its business has little to no controversy. Its Corporate & Investment Bank includes divisions working on M&A and advising, securities sales and trading, risk management and securities issues, international commercial banking and trade, and research and analysis.
Citigroup
Tracing its roots back to the origin of Citibank in 1812, Citi has 204,000 employees with business and operations in 160 countries. Of the total revenues of $72.9 billion reported for 2018, contributions from investment banking fell 7% from the prior year to $5.01 billion. EPS was $6.68.7 The bank has a strong presence in investment banking, investment management, private banking, and card processing streams.
Please note:
The above list does not rank in any particular order. Apart from the above, there are other institutions—like Nomura, Warburgs, BNP Paribas, RBS, Wells Fargo, etc.—which too are large-sized financial firms operating in investment banking space at regional and global levels.
