Overview of Investment Bank
An investment bank is a banking entity that acts as a party that collects and distributes capital to companies, government agencies and the government itself. The role of investment banks in general is to help issue and sell securities in the capital market, both as guarantors and brokers for the sale of these securities. In addition, investment banks also provide strategic advice to companies to help smooth mergers and acquisitions.
In fact, the financial services provided by most investment banks are usually quite extensive. Not only does it help companies get capital, but they also sometimes become brokers who bridge between investors and the capital market, as mutual funds and others. In fact, we also often hear that one of the providers of liquidity for the forex market is an investment bank.
So, it’s a bit tricky to describe exactly what an investment bank is. But, we can say in a nutshell, that an investment bank is a banking institution whose business activities are related to
investment field.
Top 5 Best Investment Banks Based on Revenue
Of course there are quite a number of investment banks operating in the world. Therefore, in this review, we will discuss which of the many investment banks is the best. And the list below is the top 5 Best Investment Banks based on the income generated.
The income-based valuation method is used to see how the company is performing. In addition, the size of the income can also show the market share of the company’s business and how consumers like the services provided by the company. For this reason, this method is considered the most suitable as an indicator in determining the best investment banking ranking in the world, because its relation to the performance and quality of services provided is based on customer or consumer interest in the service.
And here is a list of the top 5 investment banks based on revenue generated throughout the year.
1. J.P Morgan Chase & Co
J.P. Morgan is an investment banking company from the United States. It is a multinational company that does business in various countries around the world. J.P Morgan is also touted as the largest bank in the US with total assets reaching 3.2 thousand trillion US dollars. If we talk on a global scale, JP Morgan is in 7th place as the largest banking institution.
In the investment bank category, this time J.P Morgan ranks first as the best investment bank based on revenue so far this year. In the latest report, J.P Morgan recorded a revenue of 123.4 billion US dollars. This figure has increased from previous years, where in 2020 J.P Morgan’s revenue was at US$119.53 billion while in 2021 JP Morgan’s revenue was at US$121.68.
2. Bank of America (BAC)
From the name alone, we must have known that this bank is a bank from the United States. Bank of America (BAC) is an investment bank headquartered in Charlotte, Northern California. Bank of America is also the second largest bank in the United States after J.P Morgan.
As an investment bank, Bank of America has reached a wider market. Bank of America’s services are not only for clients in the United States, but also in other regions outside America. And even though its head office is in Charlotte, Bank of America’s activity centers are in several big cities such as New York, London, Hong Kong, Dallas and Toronto.
Bank of America is the best investment bank based on revenue generated so far this year. Based on the latest financial statements, Bank of America earned revenue of 92.47 billion US dollars. Up about 3.7 percent from the previous year, which only reached 89.11 billion US dollars.
Although this is the highest figure in the last 10 years, this income is not the highest ever achieved by Bank of America. Bank of America’s highest revenue was in 2010, with a value of 113 billion US dollars.
3. Wells Fargo
Wells Fargo is an investment bank headquartered in San Francisco, California, United States. However, its operations are based in New York City, New York. Wells Fargo is the 4th largest bank in the United States based on total assets, right below Citigroup.
Wells Fargo was founded in 1998, by Henry Wells and William Fargo. The combination of the two names was used as the company name, Wells Fargo Bank.
One of Wells Fargo’s prestige is that it became the bank with the largest capitalization in the world in 2015. Wells Fargo is also a multinational company with business activities in many countries around the world. Wells Fargo has a number of subsidiaries in several business areas, such as Wells Fargo Advisor, Wells Fargo Bank, Wells Fargo Rail and Wells Fargo Secuerities.
Wells Fargo is on the list of the best investment banks, occupying the 3rd position. Based on the latest financial reports, this company earned revenue of 74.98 billion US dollars. This value is still lower than the previous year’s revenue which reached 78.02 billion US dollars.
4. Citigroup
Citigroup is an investment bank headquartered in New York. Founded in 1998, as a result of a merger between Citigroup and Travelers Group. Citigroup is also a multinational corporation with operations worldwide. In terms of business, Citigroup is not a small company. Citigroup does business in 160 countries around the world.
In the United States, Citigroup is the 3rd largest bank after J.P Morgan and Bank of America. But in the order of the best investment banks based on revenue, Citigroup ranks fourth after Wells Faro.
Throughout 2022 which is still running, Citigroup managed to earn revenue worth US$74.53 billion. Even though it was higher than the previous year which reached US$72.22, Citigroup’s revenue is basically on a downward trend.
Citigroup’s highest revenue was in 2006 which reached 89 billion US dollars. While the lowest was in 2008, when the global monetary crisis occurred. Citigroup in that year earned revenue of 54.15 billion US dollars or 33% lower than the previous year.
5. HSBC
HSBC is one of the largest banking groups in the world. The company has about 7200 branches spread across 85 countries and territories. HSBC is headquartered at 8 Canada Square, Canary Wharf, London.
HSBC was founded in 1991 under the name HSBC Holding plc by Sir Thomas Sutherland. Its roots are The Hongkong and Shanghai Banking Corporation which has been around since 1865. Since its establishment, HSBC has grown as a financial institution as well as a large corporation on a global scale. Even in 2005, HSBC had become the number 4 largest company based on total assets owned.
In this assessment, HSBC is in 5th place in the list of the best investment banks based on revenue. Throughout the year, HSBC has managed to earn revenue of 56.29 US dollars. This figure is actually still lower than the previous year which reached 63.56 billion US dollars. And overall even HSBC’s revenue generation is on a downward trend.
Summary
So, those are the 5 best investment banks based on revenue or income throughout 2022 which are still not finished. Of course, there will be differences in income at the end of the year from each investment bank. For the first and second order it probably won’t change. But, for the 3rd and 4th order it is very possible to change, because the difference is very thin. Likewise, in 5th place, it could be shifted by Morgan Stanley, which currently has revenue of 52.02 billion US dollars or a difference of 4.27 billion dollars lower than the revenue generated by HSBC.
