Investment Banking Outlook Fall/Winter 2012 – Tough choices
Global investment banks have improved their performance over the past few months, but structural earnings problems persist.
Investment banks generated solid third quarter revenues of about EUR 60 billion, up sharply compared to the depressed third quarter of 2011. Full year 2012 revenues are expected to grow by around 10% to EUR 250 billion, although downside risks due to the sovereign debt crisis still persist. Return on Equity (ROE) could bounce back to 11%.
Thus, around 40,000 investment banking jobs are expected to be cut in the next two years – compared to mid-2011. Only 5 to 10 investment banks with a global footprint will survive over the next 3 to 5 years.
Most of the jobs are expected to be cut in the developed markets; players in emerging markets will continue hiring, building on the successful growth of the last two years.
These are the main results of the study "Investment Banking Outlook".