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Not-so-universal appeal?
Giant banks are making inroads into merger advice and securities underwriting. But they've still got a way to go to upstage Wall Street.
And now, from the department of public yet mildly shocking information: J.P. Morgan Chase & Co. advised on eight of the world's ten biggest corporate mergers last year. Sure, one was its own $58 billion purchase of Bank One Corp., but the firm still did far better than anyone would have thought when corporate lending king Chase Manhattan Corp. merged in 2000 with J.P. Morgan & Co. The idea that any commercial bank could be a lasting power in M&A or securities underwriting had long inspired little more than loud guffaws on Wall Street.
Lately, that cackling has sounded more like nervous laughter. Citigroup, the granddaddy of the so-called universal banks, took in more investment banking fee revenue than any of its competitors last year, according to New York research firm Dealogic. Right behind it was J.P. Morgan. Historic underwriting and advisory powers Goldman, Sachs & Co. and Morgan Stanley ranked third and fourth, respectively. Universal banks UBS, Credit Suisse First Boston and Deutsche Bank took the next three positions, besting old-line firms Merrill Lynch & Co. and Lehman Brothers (see table).
“我们已经有时间在投资银行服务范围内开发执行能力，”J.P. Morgan的投资银行覆盖主管道格拉斯Braunstein Douglas Braunstein说。“我们今天可以在眼中看客户，并告诉他们我们有一个世界级的咨询能力。”
The big banks are chipping away at the notion that their mountains of capital are no match for the old-line firms' brains and brand equity. But it's a slow process. Some universal banks, for instance, rely heavily on simpler, lower-fee bond and loan underwriting and haven't fully infiltrated the more lucrative M&A and equities fields.
Even J.P. Morgan still derives 26 percent of its investment banking revenue from arranging loans and 29 percent from bond underwriting. M&A accounts for a quarter of its fees (24 percent excluding the $40 million it paid itself on the Bank One deal), but the firm gets only 20 percent from equity offerings. Goldman, in comparison, generates 38 percent of its fees from mergers and 31 percent from stock deals.
“建造一个品牌需要时间，”Braunstein承认。“我们早些时候开始建立战略咨询惯例，在过去几年里一直专注于建筑股票的几年。”
Citigroup, which made its big move into investment banking by acquiring a top-tier firm, Salomon Smith Barney, in 1999, has fared better than other big banks. Half of its fees come from equities and M&A. UBS also appears to be a legitimate threat to the traditional firms, with 58 percent of fees coming from stock and merger deals.
当贷款收入排名的因素,Citi remains in first place, with $3.37 billion. Goldman and Morgan Stanley each move up a notch, and J.P. Morgan slips to fourth. UBS stays in fifth, but CSFB and Deutsche Bank slide to seventh and ninth, while Merrill and Lehman rise to sixth and eighth, respectively. By the same measure, in 1999, before the wave of deals that created the current crop of universal banks, CSFB, then a tech-banking powerhouse, ranked first, followed by Goldman, Morgan Stanley and Merrill. Citi (then Salomon Smith Barney) and J.P. Morgan were fifth and sixth, respectively.
Universal banks have gained ground in part by leveraging their lending relationships. But much of their success has been limited to bond underwriting. Companies often are more willing to throw plain-vanilla bond deals to their lending banks than merger or stock deals, which are far more significant events.
"On M&A particularly, I need to be working with an experienced banker that I trust," says one large-cap industrial CEO, who declines to be named because of the sensitivity of the topic. "A big balance sheet means nothing to me in that situation."
| Raking it in Universal banks like Citigroup and J.P. Morgan Chase & Co. win the lion's share of investment banking fees but tend to rely more on bonds and loans than do such old-line firms as Goldman, Sachs & Co. and Morgan Stanley. Below is a ranking of firms by estimated banking revenue in 2004. |