Global investment banking industry to grow at a 1.6% average annual rate through 2018

Press Release   •   Dec 09, 2013 11:10 GMT

Over the past five years, revenues within the global investment banking industry have grown at a 5.0% average annual rate, from a recessionary low of $233.1 billion in 2008 to approximately $297 billion in 2013; however, revenue still remains well below its pre-recessionary high of $364.6 billion in 2007.

The past five years have challenged the global investment banking industry. When the subprime crisis hit investment banking in late 2007, it caused billion-dollar losses for many major US and European banks. It also marked the beginning of a period of change for the industry in terms of regulation, consolidation and activities.

Financial markets in the United States and Europe struggled to recover from the financial crisis, while a slowdown in worldwide business and trading activity tempered the pace of growth in Asia, Africa and Asia.

An investment bank is a financial institution that assists individuals, corporations, and governments in raising capital by underwriting or acting as the client's agent in the issuance of securities (or both).

An investment bank may also assist companies involved in mergers and acquisitions and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services.

Entering 2013, the industry is still finding its footing and is expected to decline 1.1% as regulations in the United States and Europe take effect.

Additionally, slow worldwide economic growth, fears over high sovereign debt levels and weak consumer confidence have kept business and trading activity below pre-recessionary levels. As a result, worldwide demand for industry investment banking and broker-dealer services remains suppressed.

The industry is still seeing layoffs and declines in revenue in the United States and Europe that is slightly being offset by growth, albeit at a slowing pace, in the Asia-Pacific and Africa regions.

Over the five years to 2018, industry revenue is forecast to grow at a 1.6% average annual rate to total approximately $321.2 billion, with Asia-Pacific, Africa and Eastern Europe acting as key regional growth drivers.

For more information on the global investment banking industry, see the latest research: Global Investment Banking Industry

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