A few things probably come to mind when you think of investment banks: Wall Street, prestige, and fast-talking investment bankers. But, of course, there’s a lot more to it.
Investment banking firms play a huge role in the economy, and most of that happens far beyond the trading floor.
In this post, I’ll review the largest investment banks in 2022. Most importantly, you’ll learn which ones are the best.
11 Best Investment Banks
These are the top 11 investment banks in operation today:
- Goldman Sachs
- JPMorgan Chase
- Morgan Stanley
- Merrill & BofA Securities
- Deutsche Bank
- Jefferies Group
- Wells Fargo Securities
When most people think of investment banking, they think of Goldman first. It’s one of the oldest and largest banks of its kind and arguably the most prestigious. It’s a global investment bank headquartered in New York and commands over $1 trillion in assets as of 2020.
Goldman is well-known for arranging financing for startups, and it’s a primary dealer in the United States Treasury securities market. It also offers asset management services through Goldman Sachs Personal Financial Management.
Plus, the bank operates a consumer division known as Marcus by Goldman Sachs. With Marcus, you can open a high-yield savings account, make personal investments, and take out personal loans.
JPMorgan Chase is one of the biggest banks globally of any type. It’s the result of the 2000 merger between JP Morgan & Co. and Chase Manhattan Bank, making it the largest bank in North America. It’s also the biggest bank globally in terms of market capitalization and fifth in total assets with more than $3.5 trillion.
In general, JPMorgan is the company’s investment banking division, while Chase Bank handles consumer and commercial banking. The institution as a whole is known as a Bulge Bracket investment bank, meaning that it handles a wide variety of financial services and operations.
JPMorgan is possibly best-known for its role in facilitating corporate mergers and restructuring. That said, as you can expect, any bank of this size has a hand in virtually every aspect of investment management and capital markets.
Morgan Stanley is a multinational investment bank based in New York City with offices in 42 different countries. It was founded in 1935 and exists today as one of the largest corporations of any kind in the US.
Like many banks, Morgan Stanley took a big hit following the economic crash of 2008 but has since recovered well. It has more than $1 trillion in total assets and employs more than 60,000 people worldwide.
Operationally, Morgan Stanley is split into three divisions: Institutional Securities, Wealth Management, and Investment Management. Like other top-tier firms, the bank is involved in a wide variety of investments, including advisory services, mergers, valuations, restructuring, and more.
Merrill & BofA Securities
Bank of America, one of America’s Big Four banks, has two investment arms that fall under its umbrella: Merrill and BofA Securities. The two are connected and serve some of the same roles, but you can think of them as separate entities.
Merrill is mainly known as the bank’s wealth management division and operates an electronic trading platform called Merrill Edge. Merrill employs nearly 15,000 financial advisors.
On the other hand, BofA Securities is simply the result of a 2019 rebrand from its previous name, Bank of America Merrill Lynch. You can think of this as the powerhouse investment wing of Bank of America, which handles acquisitions, equity research, risk management, and more.
Barclays is based in London, England, and is one of the biggest banks in the world. It’s known as a Universal Bank, meaning that it deals in virtually every type of banking. This includes consumer, commercial, and of course, investment banking. Barclays operates under two main divisions: Barclays UK and Barclays International.
Barclays Corporate and Investment Bank (formerly known as Barclays Capital) is the main investment banking division of the institution. It operates in 29 different countries and rapidly expanded in US markets with its acquisition of Lehman Brothers’ in 2008.
Barclays is a primary dealer in both European government bonds and US Treasury securities. It’s also a top provider of advisory services to corporations and government clients. In the US, Barclays Bank also offers an online savings account for everyday consumers.
Deutsche Bank is another one of the biggest investment banks in Europe. It’s listed on both the Frankfurt and New York stock exchanges and has a large presence in Europe, the Americas, and Asia. It was founded in 1870 and controls more than $1 trillion in assets.
Deutsche Bank’s business model is built around three main arms: it’s Corporate & Investment Bank, Private & Commercial Bank, and Asset Management division. Within corporate and investment banking, the bank is broken down into five main focus areas:
- Corporate finance
- Equities / Fixed income and currencies
- Global Capital Markets
- Global Transaction Banking
Citigroup, based out of New York, is the third-largest bank in the US. It’s one of nine global investment banks in the Bulge Bracket and boasts over $2 trillion in assets. You’re probably familiar with Citibank, the consumer banking division of Citigroup.
Overall, it’s also one of the more confusing banks to understand because it has so many different divisions and operations. In terms of investment banking, Citigroup provides financing and advisory services to institutions and governments in 160 different countries. It also regularly deals in mergers and acquisitions, plus underwriting of IPOs.
Evercore is based in New York and is one of the world’s best-known global boutique investment banks. It was founded in 1995 with the specific intent of providing investment banking services without the conflicts of interest of larger institutions. Since its inception, it has advised on nearly $5 trillion in various investments.
Though it may be smaller than the other banks I’ve covered, Evercore is a huge player in all of the same areas. It has 28 offices in 11 countries and advises its clients on mergers, public offerings, private equity investing, and more.
HSBC is is a British investment bank with nearly $3 trillion in assets, making it the second-largest bank in all of Europe. It was founded in Hong Kong in 1865 but has been based out of London since the mid-1900s.
As of 2020, HSBC stands as the sixth-largest bank globally and the 40th largest public company. It’s primarily listed on both the Hong Kong and London stock exchanges but has secondary listings in New York and Bermuda.
For US-based consumers, the company’s HSBC Bank division offers checking and savings accounts.
The Jefferies Group is an international, independent investment bank based in New York City. It exists as one part of the larger Jefferies Financial Group, which owns and operates several other financial institutions. In terms of total revenue, Jefferies is the seventh-largest investment bank in the world.
Jefferies was founded in 1962 and helps its clients with financial advisory services, institutional brokerage, asset management services, and more. It’s an extremely well-respected name in the industry and has been rewarded with multiple accolades over its years of operation.
Wells Fargo Securities
Wells Fargo is a multinational financial services company with its headquarters in San Francisco. It operates the largest consumer bank in the US in terms of total branches and has by far the biggest presence on the West Coast.
Though it’s mainly known for retail banking, Wells Fargo also operates as an investment bank through Wells Fargo Securities, LLC. It works with corporate, government, and commercial real estate clients, focusing on mergers, acquisitions, leveraged financing, loan syndication, and more.
Other Top Investment Banks
- Credit Suisse
- Harris Williams
- RBC Capital Markets
What is an Investment Bank?
An investment bank is a financial institution that operates as an intermediary for large and often complex financial transactions. They work on behalf of individuals, corporations, and governments.
These banks can handle everything from raising capital for Initial Public Offerings (IPOs) through underwriting, issuing securities, or facilitating mergers and acquisitions.
Investment banks are broken into three markets, based on size:
- Bulge Market
- Middle Market
- Boutique Market
Unlike consumer or commercial banking, these banks do not typically accept individual deposits. Rather than issuing checking accounts and credit cards, investment banks work on a larger scale of corporate finance. That said, many of these institutions also own and operate consumer banks.
Do I need an investment bank account?
If you’re just starting out in your career, it’s unlikely that you’ll have much use for the financial services of an investment bank just yet.
But, if you run your own business or you’ve built up a high net worth, you should be aware of how these banks can help with asset and wealth management.
Investment Banks FAQs
Who are the top 5 investment banks, and what are their features?
It’s tough to narrow it down specifically because it varies based on the region and services provided. For example, some investment banks focus on IPOs, while others might be better suited to assist with mergers and acquisitions.
The list you just read should give you an idea of the top overall players in the field. Take some time to research each one more thoroughly, and you should get an idea of who is best at what.
What are the Big 4 investment banks?
At the moment, the top four investment banks are JPMorgan Chase, Goldman Sachs, BofA Securities, and Morgan Stanley.
In the US, the Big Four most commonly refers to the country’s four biggest overall banks: Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo. But, as you can see, the top four are different when we look specifically at investment banking.
What are the Tier 1 investment banks?
Tier 1 is often used interchangeably with the Bulge Bracket in investment banking. Therefore, banks in this tier would include all those that work in the largest markets.
In general, there is no defined list of banks operating within the Bulge Bracket, though the following banks are most commonly associated with it:
- Bank of America
- Credit Suisse
- Deutsche Bank
- Goldman Sachs
- JPMorgan Chase
- Morgan Stanley
Understanding Investment Banking
Investment banking is a complicated game. For the average consumer, it won’t play much of a role in your day-to-day. That said, there are plenty of reasons to be aware of how these institutions function in our financial system.
Whether you want to be more aware of how a global economy works, or you’re simply hoping to get a job at an investment bank, it’s important to understand who these companies are and how they operate.
Now that you know more about the major players, you’re already ahead of the pack. Here’s to developing a greater understanding of our financial system and getting it to work for you.