Goldman Sachs, JPMorgan, Morgan Stanley: bankers' travails
The season of banks' second quarter results is nearly upon us, starting with JPMorgan, Citi and Wells Fargo this Friday. For investment bankers, it will mostly not be pretty. But for M&A bankers especially, it could be very ugly.
Dick Bove, the veteran US banking analyst, says M&A bankers at leading American banks have had a truly terrible second quarter. He thinks year-on-year revenues in M&A at leading US investment banks were down 54% year-on-year in Q2. At universal banks, he thinks they were down 60%.
Bove says some banks' M&A bankers did better than others (Goldman Sachs, Bank of America), but no M&A bankers did well.
How is it, then, that M&A bankers have been making ebullient statements about their pipelines? This is partly because it's in M&A bankers' DNA to do this, but also because things genuinely are better than they were a few months' ago. Bove's quarter-on-quarter charts are looking far more promising, particularly at Bank of America and Morgan Stanley. M&A bankers there will be hoping that the recent recovery will be sufficient to create a stay of execution. JPMorgan's M&A bankers might have a harder time selling this story.
Away from M&A, Bove says US equity capital markets (ECM) bankers had the finest time in the second quarter. US debt capital markets (DCM) bankers focused on high yield issuance had the second finest. But you probably didn't want to be a banker working on leveraged loans or debt capital markets in Asia.
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