It Won’t Be 2007 Again Until 2024 (And Not Really Even Then) - Dealbreaker

It Won’t Be 2007 Again Until 2024 (And Not Really Even Then)

Author:
Updated:
Original:

Deutsche Bank has gone back and re-crunched some numbers and found a couple of things about the line of business it is in. For one, it may have, well, let’s say misspoke when it suggested in December that the Goldmans of the world would inherit the banking industry. Seems that may have been at best a touch optimistic and at worst completely wrong. The Germans have also found that investment banking may not be an industry that one wants to inherit at all.

Investment banking revenues aren’t likely to reach 2007 levels for another decade, according to a wide-ranging report on the future of the industry, which asserts that the bulk of the recent revenue decline is structural. [...] “By 2024 we expect trend demand for global investment banking services to reach $409 billion. This is just 5% ahead of the 2007 peak in nominal terms, and 48% below 2007 levels relative to GDP.” [...] This contrasts with their earlier view, expressed in December last year, that commercial banking powerhouses were pulling away in fixed income. At that time, the German bank said: “Overall, we conclude that few banks are really going to compete to be full-service universal banks, and even some banks we previously saw as ‘scale winners’ are struggling to stay in touch with the top three in FICC.”

Investment Banks Face 10-Year Wait for Pre-Crisis Levels [WSJ MoneyBeat blog]

Related

(Getty Images for Yahoo Finance)

Jes Staley Really Showed Us

Barclays’ chief gets to keep his investment bank and his job.

deutschebank3

What Does Not Kill Deutsche Bank, Uh, Does Not Kill It

And the second quarter definitely did not kill it!