Investment Banking & Securities Intermediation in the US

Strong returns in various financial markets and increased trading volumes have benefited businesses in the industry. Companies provide underwriting, brokering and market-making services for different financial instruments, including bonds, stocks and derivatives. Businesses benefited from improving...

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Bibliographic Details
Format:	Market Research
Language:	eng
Subjects:	Brokering and dealing services for derivative contracts Commodity contracts brokerage Commodity contracts dealing Commodity contracts options brokerage Commodity contracts options dealing Financial advisory and investment management services Foreign currency exchange dealing Futures commodity contracts brokerage Futures commodity contracts dealing Trading and related services Underwriting, brokering and dealing services
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Summary:	Strong returns in various financial markets and increased trading volumes have benefited businesses in the industry. Companies provide underwriting, brokering and market-making services for different financial instruments, including bonds, stocks and derivatives. Businesses benefited from improving macroeconomic conditions and interest rates remaining below historical averages. Overall, revenue has been growing at a CAGR of 5.6% over the past five years and is expected to total $392.8 billion in 2024, when revenue will increase by an estimated 0.9%. While many industries struggled in 2020 due to COVID-19, businesses benefited from the volatility caused by the pandemic. Primarily, companies have benefited from increased trading activity on behalf of their clients due to fluctuations in asset prices. This has led to higher trade execution fees for firms in 2020 and 2021. Similarly, debt underwriting increased in 2020 and 2021 as many businesses have turned to investment bankers to help raise cash for various ventures. Also, improved scalability of operations, especially regarding trading services conducted by securities intermediates, has helped increase industry profits. Structural changes have forced the industry's smaller businesses to evolve. Because competing in trading services requires massive investments in technology and compliance, boutique investment banks have alternatively focused on advising in merger and acquisition (M&A) activity. Boutique investment banks' total share of M&A revenue is forecast to grow through the end of 2029. Furthermore, the industry will benefit from improved macroeconomic conditions after the adverse effects of the pandemic dissipate. This will help asset and interest rate levels rise, thus allowing operators to generate more from equity underwriting and lending activities. Overall, revenue is forecast to grow at a CAGR of 3.8% over the five years to 2029, totaling $474.3 billion.