Table of contents
Ten key investment banking conclusions ............................................................................................................ 5
Executive summary................................................................................................................................................ 6
Positioning in the European investment banks ................................................................................................. 12
Deutsche Bank – rated In Line .....................................................................................................................................12
Barclays – rated Outperform ........................................................................................................................................13
Credit Suisse – rated In Line ........................................................................................................................................14
UBS – rated Underperform...........................................................................................................................................15
Investment banking – what makes it tick............................................................................................................ 16
Market size and share ..................................................................................................................................................16
Drivers of growth ..........................................................................................................................................................17
Investment banks – future economics ................................................................................................................ 23
Absence of operational leverage ..................................................................................................................................23
Profitability diagnosed ..................................................................................................................................................24
The new business model..............................................................................................................................................27
Tomorrow’s investment bank........................................................................................................................................34
Fixed income......................................................................................................................................................... 38
Rates ...................................................................................................................................................................... 40
Market size ...................................................................................................................................................................40
Market shares...............................................................................................................................................................41
Market drivers...............................................................................................................................................................42
Credit...................................................................................................................................................................... 46
Market size ...................................................................................................................................................................46
Market positions ...........................................................................................................................................................48
Credit derivatives..........................................................................................................................................................50
Market drivers...............................................................................................................................................................51
Success factors ............................................................................................................................................................52
The future of credit .......................................................................................................................................................53
Forex ...................................................................................................................................................................... 56
Market size ...................................................................................................................................................................56
Market drivers...............................................................................................................................................................57
Forecasts......................................................................................................................................................................59
Commodities ......................................................................................................................................................... 60
Market size ...................................................................................................................................................................60
Market drivers...............................................................................................................................................................61
Success factors ............................................................................................................................................................62
Future development......................................................................................................................................................63
Equities.................................................................................................................................................................. 65
Market size ...................................................................................................................................................................65
Market participants .......................................................................................................................................................66
Market drivers...............................................................................................................................................................67
Future development......................................................................................................................................................69
Advisory ................................................................................................................................................................ 73
Equity capital markets (ECM) .......................................................................................................................................73
Debt capital markets (DCM) .........................................................................................................................................75
M&A..............................................................................................................................................................................77