What are the top 10 investment banks to watch?
There are hundreds of investment banks around the world, but it’s quite easy to identify the top institutions. These companies have been selected based on their worldwide renown.
What are investment banks?
Investment banks are major financial institutions that provide specialist services such as raising funds by issuing shares, and facilitating mergers and acquisitions (M&A). Every transaction that an investment bank handles is done on a large scale. For example, if drinks company Diageo wanted to sell £8 billion worth of bonds to expand its business into Russia, it would approach an investment bank to assist with finding buyers.
How do investment banks work?
Investment banks offer financial intermediary services to governments, pension funds, hedge funds and large corporations. These banks work differently from investment banking divisions of consumer (retail) banks, because they offer services such as underwriting, M&A, sales and trading, and asset management.
Learn more about the differences between retail and investment banks
Investment banks are often involved in several activities when assisting companies with their needs. For example, in the case of an initial public offering (IPO), the bank will examine a business’s financials, assist with drafting a prospectus, offer advice post-IPO, and more.
How to buy and trade investment bank shares
- Do your research – we’ve outlined useful information in this guide
- Create an account or log in
- Choose whether to invest by share dealing or trade using spread bets and CFDs
- Pick an investment bank and take steps to manage your risk
- Open and monitor your position
Share dealing enables you to own the shares outright. As buying physical shares makes you a shareholder, you’d profit if you sell them at a price that's higher than the original buy price. You could also receive dividends if the investment bank grants them. If you choose to sell your shares at a price that’s lower than what you paid, you’d incur a loss, which would never exceed your initial outlay (excluding any additional fees).
With us, you’ll use spread bets and CFDs, which lets you trade with leverage, if you want to speculate on future price movements of investment banks. You’d buy if you think the share price will go up, or sell if you think it’ll go down. Leverage enables you to only put up a small deposit (called margin) to get full exposure to the trade. But, it also increases both potential profits and possible losses to the full value of the trade, making it important for you to manage your risk properly.
Top 10 investment banks to watch
These shares have been chosen for recent market news. Past performance is not a guide to future performance. Always do your own research.
- JPMorgan Chase
- Bank of America
- Wells Fargo
- Citigroup
- Morgan Stanley
- Goldman Sachs
- HSBC Holdings
- Barclays
- UBS Group
- Deutsche Bank
Note that these banks aren’t listed in any particular order, they’re simply among the most famous investment banks in the world. This list was last updated on 29 April 2024.
JPMorgan Chase
The history of JPMorgan Chase can be traced back to 1799, but the bank is completely different today from what it was more than 200 years ago. The company was founded in December 2000, after a merger between JPMorgan & Co and Chase Manhattan Corporation.
It has a presence in more than 100 countries and is said to manage more than $3.9 trillion in assets. In FY2023, the firm generated revenue of $239 billion. As at April 2024, JPMorgan Chase has a market capitalisation of $555.7 billion.
Bank of America
Bank of American is a financial services provider with a very prominent investment-banking arm, which came about through the acquisition of Merrill Lynch in 2008. The company rebranded the Merrill Lynch arm as BofA Securities.
Some of the bank’s other offerings include M&A, risk management, wealth management, lending and trading. The corporation manages around $2.5 trillion in assets making it the second-largest investment bank in the US. Its 2023 full year revenue amounted to nearly $172 billion, while its net income was around $24.9 billion.
The Bank of America’s market cap was pinned at $298.5 billion as of 29 April 2024.
Wells Fargo
Wells Fargo is a US investment bank that covers a range of services, from wholesale banking and loans to wealth and investment management. This firm, which was founded in 1852, also runs a consumer bank.
Wells Fargo manages around $2 trillion in consolidated assets. Revenue was at $115.3 billion in 2023 and its net income was pinned at $18 billion. As at April 2024, Wells Fargo’s market capitalisation was $209.8 billion.
Citigroup
American corporation Citigroup is more than 200 years old, it employs over 210,000 people, has more than 200 million customer accounts and has a presence in 160 countries. Citigroup has a strong focus on investment banking, managing around $1.7 trillion in assets,1 but it also operates a retail bank, called Citibank, with around 2,500 branches.
From its 2023 results, Citi generated revenues of $78.5 billion, and the company has a net income of $9.2 billion. As of April 2024, Citigroup has a market cap of $119.5 billion.
Morgan Stanley
Morgan Stanley has circa $1.5 trillion assets under management, as of the first quarter of 2024. This, coupled with more than 40 years in business, makes it one of the major players in global investment banking. In addition to investment management, the company also provides wealth management and corporate restructuring services.
In 2023, the firm’s revenue was at $56.2 billion, with a net income of $8.5 billion.
Morgan Stanley’s market capitalisation was pegged at $151.8 billion on 29 April 2024.
Goldman Sachs
Founded in 1869, Goldman Sachs provides investing and lending, private equity, investment management, as well as institutional client services.
The bank is infamous for its role in the 2008 financial crisis but remains a powerhouse in the investment bank industry. Goldman Sachs operates a standalone online consumer bank and also engages in several social responsibility initiatives.
The company’s revenue for 2023 was $46.3 billion. Its market cap, as of April 2024, was $139.2 billion.
HSBC Holdings
UK-based HSBC Holdings was founded in 1865 and has more than 40 million clients based in 64 countries. It manages around $3 trillion in assets. Services of the firm include M&A, investment banking and private banking.
The company’s revenue for 2023 was $66.1 billion, while profits rose to $30 billion. Meanwhile, its market capitalisation was $156.8 billion as of April 2024.
Barclays
British giant Barclays is the second-largest British investment bank by total assets (managing £1.1 trillion). Barclays listed on the London Stock Exchange (LSE) in 1953 and it’s also a constituent of the FTSE 100. Its offering ranges from corporate banking to wealth and investment management.
The firm’s market cap, as of 29 April 2024, is $38.4 billion.
UBS Group
UBS Group is a multinational investment bank founded and based in Switzerland. The bank recently took over Credit Suisse after its competitor ran into financial difficulties due to various scandals and fears of a bank run. UBS is well-known for its strict bank-client confidentiality and is considered a global systemically important bank.
It now has circa $5.5 trillion in assets under management.
Deutsche Bank
Deutsche Bank was founded in 1870. As with UBS, it has a big bearing on investment banking in the US. It holds around $591 billion in assets under management. The company's services include M&A, advisory services and risk management.
As of April 2024, its market cap was $35.4 billion.
How do investment banks make money?
Investment banks make money through the services that they offer – by charging a fixed rate or percentage per transaction, collecting interest on monies raised, and charging commission based on the value of a trade. Here are just a few of the activities for which they charge a fee:
- Helping companies to launch an IPO
- Engaging in proprietary trading
- Issuing bonds to raise a company’s debt capital
- Insuring bonds
Investment banks vs commercial banks: what’s the difference?
There are quite significant differences between investment banks and commercial (retail) banks, with each of the two banking types offering services distinct from each other. Investment banks cater mainly to corporate clients and institutional investors, while commercial banks usually service both individual and corporate clients.
Further, investment banks offer services such as underwriting and asset management, while commercial banks provide more standard services related to their clients’ everyday financial needs. Their services tend to include lending, accepting deposits, making payments and facilitating debit orders, for example.
Commercial banks, on the other hand, make money from the fees they charge banking clients (as indicated above), as well as from loan interest.
Investment banks summed up
- Investment banks are financial institutions that provide specialist services such as underwriting, asset management, advisory services, and M&A
- Investment banks make money from the services they offer in several ways, including charging interest and commission
- You can trade multi-billion-dollar investment banks with us using spread bets and CFDs
- You can become a shareholder of an investment bank by using our share dealing platform
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*Based on revenue excluding FX (published financial statements, October 2021).
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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