Banks Had a Tough Year With Investment Banking, but Trading Has Shined
Banks have had a tough year when it comes to investment banking, with most reporting year-over-year declines in segment revenue somewhere between 40% and 60%. Obviously, 2021's strong investment banking performance has made year-over-year comparisons tough. Equity and debt underwriting have really dried up due to market volatility and lower public and private valuations.
Still, what seems to get less attention is that trading -- a bank segment typically housed inside a corporate and investment banking division -- has held up considerably well and is even up for many banks this year. In fact, trading has shined this year and has been a key bright spot for banks. Let's take a look.
Many people who talk about investment banking use it broadly, which can make things quite confusing. But investment banking fees are really composed of mergers and acquisitions (M&A) advisory and equity and debt underwriting. M&A advisory involves assisting companies in purchasing other companies or trying to sell themselves.
Source Fool.com
