Goldman Sachs is the most prestigious investment bank. The nearly 150-year-old institution is a public company with $917 billion in assets as of 2017. Multiple high-ranking government officials spent time at Goldman, including U.S. Treasury secretaries, White House advisors, and leadership roles in central banks and governments around the world. This makes it incredibly influential and a major power hub on Wall Street.
While the bank has endured its fair share of controversies, including a role in the 2008 financial crisis, it also engages in a wide range of corporate citizenship initiatives.
Some major services and divisions include financial advisory and underwriting, its own investing and lending portfolios, institutional investor services, investment management, and private equity. Outside of investment banking, the company operates Marcus, an online consumer bank.
J.P. Morgan Chase is one of the largest financial institutions in the world. This massive company is made up primarily of two divisions. The Chase side of the company is a business and commercial bank. The J.P. Morgan brand is focused more on investments, including investment banking. The company holds a mind-boggling $2.5 trillion in assets.
On its website, J.P. Morgan puts a big focus on mergers and acquisitions, a lucrative investment banking service. Other offerings include advisory services, capital raising, and risk management.
Like most large banks, J.P. Morgan Chase came together from a series of mergers and acquisitions of its own. Predecessors include Chase Manhattan Bank, Bank One, Bear Stearns, and Washington Mutual. The oldest predecessor was the third oldest bank in the country and 31st oldest in the world. It was founded by Aaron Burr. Yes, the same Aaron Burr of Hamilton infamy.
Barclays may not be the biggest name on this side of The Pond, but in the United Kingdom, everyone is familiar with Barclays. Headquartered in London, Barclays was founded in 1690 and holds £1.1 trillion in assets (around $1.5 trillion USD).
Consumers in the United States may be familiar with Barclays credit cards, and a consumer banking service is also under development for the U.S. It has a major presence in New York and other world financial centers both in and out of Europe.
Barclays made a big leap into U.S. investment banking with the acquisition of Lehman Brothers in 2008. Another investment bank with a history of scandal (something pretty consistent in this industry), Barclays took heat for its compliance in the Lehman acquisition and made headlines in 2012 for its role in the LIBOR scandal. Nonetheless, it remains a large and respected investment bank and holds a role as one of the biggest investment banks in the world.
Want to learn more? Check out our full review of Barclays.
With roots going back to 1924, Morgan Stanley is another major investment bank in the United States. While it doesn’t make it into the trillion dollars in assets club, it holds a respectable $852 billion and falls squarely in the “too big to fail” banking stable. The current Morgan Stanley operation came about in 1997 with a merger creating Morgan Stanely Dean Witter Discover & Co. The name went back to simply Morgan Stanley in 2001.
The international investment bank operates three main divisions: institutions securities, wealth management, and investment management. The wealth management division services individual investors. Much of this division came from the acquisition of Smith Barney, which had previously acquired famed investment bank Salomon Brothers.
Like other major investment banks, Morgan Stanley offers a suite of products for large businesses, including mergers and acquisitions, advising, IPOs, restructurings, and lending. The company just barely survived the 2008 financial crisis and was the largest recipient of TARP (Troubled Asset Relief Program) funds from the government during that tumultuous era for financial companies. It turned itself around after 2008 and today lives up to the long history as a leader in corporate buyouts.
The investment banking arm of Bank of America, this investment bank came about through a long chain of mergers, most recently Bank of America’s acquisition of major investment bank Merrill Lynch during the financial crisis of 2008. It operates around the world with major centers in Hong Kong, London, and New York. Bank of America is the second biggest US bank with $2.3 trillion in assets.
Bank of America Merrill Lynch investment banking offerings include mergers and acquisitions, debt and equity offerings, lending, trading, risk management, and other services. The old Merrill Lynch wealth advising division lives on as Merrill Lynch, also owned by Bank of America but with separate operations.
Like other investment banks, the advisory services of Bank of America Merrill Lynch are important for companies looking to raise funds in public markets. When going public, investment bankers help determine the initial share price while balancing liquidity and demand. They also help companies sell bonds, another major option to raise capital.
Investors around the world often look to the Swiss currency as a safe haven when the U.S. dollar appears unstable, and Swiss banks have a reputation for professionalism and privacy when handling large financial transactions. A leader among Swiss banks is Credit Suisse, tracing its roots back to 1856.
Credit Suisse came under fire from U.S. regulators for allowing its well-known client confidentiality to help others avoid paying taxes. The company has CHF 796 Billion in assets, equivalent to about $800 billion USD. The company has a major U.S. presence, partially driven by its merger with First Boston with a relationship going back to 1978.
With a global reach, it was a major underwriter in many significant U.S. deals, including the Amazon IPO and projects for Apple Computer. Second in size only to UBS in Switzerland, Credit Suisse operates in major financial centers around the world.
Based in Frankfurt, Deutsche Bank holds about €1.5 trillion in assets, making it one of the four biggest investment banks in Europe and the largest in the Eurozone. Founded in 1870, Deutsche Bank is a full-service financial institution with a powerful and influential investment banking division.
Deutsche Bank is a major operator in the United States and around the world and made a noteworthy contribution to the 2008 financial crisis through its work in the mortgage securities market. That led to a $7.2 billion fine in 2017. The bank has dealt with a series of controversies over the last few years, including doing business with sanctioned countries, money laundering, and the 2015 LIBOR scandal. It is currently wrapped up in the Mueller investigation of President Donald Trump due to its strong lending relationship with Trump’s businesses.
However, much of its business has little to no controversy. Its Corporate & Investment Bank includes divisions working on M&A and advising, securities sales and trading, risk management and securities issues, international commercial banking and trade, and research and analysis.
RBC Capital Markets is the investment bank of RBC, headquartered in Toronto, Canada. With offices in the United States and other countries, this major investment bank ranks as one of the largest in North America and the world. Royal Bank of Canada, better known as RBC, holds CAD $1.3 trillion in assets and has roots going back to 1869.
RBC Capital Markets claims 70 offices in 15 countries. One interesting product for a non-US company is its focus in U.S. municipal finance (muni bonds). The bank also works in traditional investment banking services like M&A and equity and debt market issues.
RBC sits in a sweet spot with easy access to the United States and an international focus. When you put it all together, that makes RBC a compelling and competitive international investment bank. In 2017, RBC joined the list of globally systemically important banks, or the “too big to fail” list.
The 8 Best Investment Banks of 2019
Money makes the world go 'round
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When you think of a bank, you probably think of a place that takes deposits, maintains checking and savings accounts, and offers loans like mortgages. That’s true, but there’s an entirely different type of bank focused on stocks, bonds, and investment products. These financial firms may be a part of a larger firm that also offers commercial banking services, but they take a unique role in the financial system that influences the entire economy.
The best investment banks are large financial institutions that play an important role in facilitating money moving around the economy. Initial public offerings, for example, are an opportunity for investors to help a company raise money while also getting a stake in the business.
Full-service investment banks offer a wide range of business and investment services. Many of them also own or affiliate with a consumer bank. Most regular consumers won’t need investment banking services, but for growing businesses and high-net-worth individuals, an investment bank may offer unique financial products and services to meet your needs. Need some advice when it comes to finding one to use? Take a look at our picks below for the best investment banks.