The American banking group JP Morgan is decidedly unbeatable in its sector. As M&A deals stalled in 2022, JP Morgan generated $7 billion in revenue from its investment banking business, according to data by Archyde.com.
While this turnover may seem high on the scale of several financial institutions in Africa, it should be noted that it is down 47% compared to 2021.
This trend is not specific to the world’s largest bank in terms of market capitalization. Its direct competitors, which are Goldman Sachs, Bank of America Securities, Morgan Stanley, Citigroup, Barclays or Credit Suisse, all recorded a fall in their turnover in the investment banking activity.
Beyond that, it’s the industry as a whole that saw a major downturn in 2022. Aggregate revenue for all investment banks fell 33% to $110.5 billion. This is the lowest level since 2019 (note: before the Covid-19 pandemic), and the fourth quarter was the worst performing since 2020.
Investment banking revenues include fees earned on syndicated loans, mergers and acquisitions, bond issues in international markets, and the management of large stock exchange transactions.
This drop in business in investment banking reflects the general decline in confidence for financiers or companies, according to market professionals. Sub-Saharan Africa is no exception to this gloom. While waiting for the complete data for the year 2022, the trends at the end of the third quarter were already in decline. For the period, investment banking revenue was $327.5 million, down 22% from the same period in 2021, and its lowest level since 2013.
