If banks did not exist, where would we deposit money? Where would we borrow millions and billions of dollars from? Where would we invest money? The largest five banks in America, JP Morgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs have combined assets totaling more than $10tn. They provide an essential service to the 30 million small and medium enterprises (SMEs) and 16,000 large businesses (more than 500 staff) across America. These businesses rely on the existence of corporate and investment banks to succeed.
Corporate banking is experiencing a period of growth, according to the 2019 Banking Industry Outlook released by Deloitte, global corporate lending is on an upward trajectory, with the Americas region leading growth. Revenue from corporate lending grew by 19.5% in the Americas from 2015 to 2017. Corporate lending in the US seems to be benefiting from currently relaxed credit standards. In contrast the global investment banking industry has yet to find its footing after the financial crisis. On the investment banking front, the global dominance of US banks continues, with the top spots for mergers and acquisitions, equity and fixed-income underwriting being held by US banks. In fact, among the top global investment banks, US banks’ market share has increased from 49% in 2010 to 58% in 2017/18.
According to D&B Hoovers the US investment banking industry includes about 3,000 companies with combined annual revenue of $140bn, and the top 50 largest firms generate more than 90% of the industry’s revenue. The National Investment Banking Association reports that Technology, Healthcare and Industrials have taken the lead in terms of deal activity and growth Investment Banking teams this year. With numerous potential tech IPO’s in the headlines, M&A activity continues to be impacted by technological advancement. According to Deloitte, banks must not only have advanced trade execution technology, but also have predictive analytics to help solve clients’ problems. Amidst a strong economic performance and deal activity, demand for investment banking talent remains high, with many candidates moving from bulge brackets to middle market platforms or boutique and advisory firms.
According to figures from Bureau of Labor Statistics, employment in financial services is projected to grow seven percent from 2018 to 2028, about as fast as the average for all occupations. Demand in particular for investment banking and retirement services are likely to create employment growth.