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BNP Paribas is beating Deutsche Bank in investment banking

BNP Paribas wanted to be Europe’s top investment bank – and it seems be on track to succeed.

Data from market intelligence firm Dealogic shows that BNP had the 7th highest investment banking revenues in the world in the first quarter of 2023, up from 12th in Q1 2022. In the process of rising up the league table, it’s leapfrogged a number of rivals – including Deutsche Bank.

Global investment banking revenue is comprised of M&A, capital markets, and loans.

BNP Paribas is beating Deutsche Bank, but the top European bank investment bank on a global basis is still Barclays, where revenues are nearly twice as high. BNP's stated aspiration to be "the first European corporate and investment bank among global tier one players," seems to suggest it would quite like to vanquish Barclays too, if possible. 

BNP’s success isn't the result of revenue growth. It is the result of revenues falling by less than elswhere. Dealogic says BNP's Q1 global investment banking revenues were down “only” 22%, while Deutsche’s were down 45%. In this sense, BNP looks more like Asian banks  such as CITIC and Mizuho (10% and 13% respectively) than to other western players.

Where did Deutsche Bank go wrong? Falling financial sponsor revenues might be to blame. Nearly a third of Deutsche's revenues were derived from deals involving financial sponsors (private equity firms) in Q1 2022, but fees paid by financial sponsors were 50% lower in Q1 2023. 

Credit Suisse’s implosion may have softened the blow for other investment banks. Credit Suisse's investment banking revenues fell nearly 70% between Q12 '22 and Q2 '23 and rival banks will have been able to seize market share.

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Have a confidential story, tip, or comment you’d like to share? Contact: Zeno.Toulon@efinancialcareers.com in the first instance.

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AUTHORZeno Toulon

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