JPMorgan Leads in Year Bankers Make Money on Each Other

Posted Mar 4th 2010 11:40AM by Tom Johansmeyer
Filed under: JPMorgan Chase (JPM), Goldman Sachs Group (GS), Morgan Stanley (MS), Merck and Co (MRK)

Thanks to a trillion dollars in credit losses write-downs on mortgage-related securities in 2007 and 2008, financial companies around the world had a lot of capital to recapture. So, in the first half of 2009, they issued stock. More than half the new shares to come out worldwide in those six months were issued by banks and brokers. All this stock, of course, translated to fees for investment banks. In a strange way, consequently, the financial industry healed itself.

According to Bloomberg, investment banking fees surged 13% in 2009, from $53.1 billion to $59.8 billion. This is still far short of the $86.9 billion record set in 2007, but it's at least a step in the right direction. Even with the surge of bank and broker shares issued in the first two quarters last year, total activity was still lower than in 2008.

The top investment bank in the business last year was JP Morgan Chase (JPM). Its $4.97 billion represented a 16% increase from 2008, when JP Morgan Chase also topped the market. Goldman Sachs (GS) took second in the investment banking space, though it led mergers and acquisitions in part because it advised Schering-Plough on its $47 billion sale to Merck (MRK).

Morgan Stanley (MS) sustained a decline in investment banking fees of close to 50%in 2008 experienced a 43% increase last year – which wasn't enough to bring it back to its 2007 level of $6.36 billion. Credit Suisse (CS) ticked up two places to #6, while Citigroup took fifth, falling for the second year in a row.

If equity markets stabilize, merger deals could see an increase in value of 20% from 2009, and James Amine of Credit Suisse says that share, bond, syndicated loan and securitization sales could increase by 30% this year.

Tags: banking, credit suisse, cs, Goldman Sachs, GS, inthenews, investment banking, JPM, JpmorganChase, merck, Morgan Stanley, MRK, ms, Schering-Plough

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Reader Comments (Page 1 of 1)

4-29-2010 @ 3:22AM

Jehnavi said...

I here all the whining yet let me remember, the government closes Bear Stearns and then loans JP Morgan Chase the money (great deal by the way) to buy their assets but the govt takes on the liablilities. Similar deal for Chase later to buy Washington Mutual. Bank of America gets great govt backed deal to buy Countrywide's huge mortgage servicing portfolio for pennies on the dollar and govt help again to buy Merrill Lynch. Wells Fargo receives government largesse and money to buy Wachovia and it's assets but again govt. ( read taxpayers) absorb the liabilites. The Federal Reserve opens the discount window and loans money at virtually no interest to the banks. Banks make money just buy investing the money not by lending it. Does anyone see a pattern here. The GOVERNMENT is the CAUSE of the banks getting larger. The three largest banks in the country mentioned above have all grown significantly due to government interference. Now you all want to whine about how big they are and say the government should do something about it.
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