Goldman Sachs appears to be winning share from JPMorgan
Goldman Sachs may be cutting pay and reinstating its policy of trimming headcount, but it's also dominating its American banking rivals when it comes to winning market share in sales and trading and M&A and corporate finance.
Matt O'Connor and his team of US banking analysts at Deutsche Bank have produced the following charts in response to last week's results from US bank. Goldman Sachs is the clear winner. By comparison, JPMorgan appears to have lost out.
US banks' revenue trends:
US banks' market share trends:
By Deutsche Bank's estimates, Goldman Sachs won market share across investment banking (IB - M&A and corporate finance, fixed income currencies and commodities (FICC) trading and equities trading in the second quarter. By comparison, JPMorgan lost share in both investment banking and fixed income sales and trading in Q2.
Goldman's strong performance in the three months to June caps off market share growth in investment banking and fixed income trading across each of the previous four quarters on average. Equities sales and trading at GS looks less healthy, but can probably be excused. Morgan Stanley continues to clean-up in equities (O'Connor suggests that Morgan Stanley's weakness in IB is the possible result of its skew towards ECM).
What's up at JPMorgan? O'Connor says the bank's comparatively poor showing might be the result of a reduction in risk weighted assets in Q2.
Meanwhile, Bank of America's fixed income sales and trading business doesn't look quite as healthy as all its recent hiring might suggest. BofA has added 60 fixed income traders in London so far this year, but it continued to lose market share in fixed income trading in the second quarter. Improvements will be expected soon.
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