Investment banks will benefit from staff cuts and restructuring
London, United Kingdom (PRWEB) May 24, 2012
The Investment Banking and Securities Brokerage industry has been on a roller-coaster ride over the past five years. IBISWorld estimates industry revenue will contract at an annualised 1.6% over the five years through 2012-13 to total £41.6 billion. The industry faces challenges over the next five years. IBISWorld industry analyst Steven Connell says,”with European politicians and regulators seemingly intent on damaging the UK banking sector and the economy forecast to remain sluggish for a few years, subdued revenue growth and more job losses are expected in 2013-14”. Volatile and downward trending equity markets and widespread investor wariness of shares will continue to hit smaller brokers hard, driving consolidation in the sector. Other major banks are also expected to follow the Royal Bank of Scotland's lead in reviewing their proprietary trading, equity markets and investment banking activities. Regulation changes forcing the ring-fencing of retail banking operations could result in some of the industry's largest players separating their investment banking operations. Securities brokers will continue to lose business to online competition.
However, all is not lost for the industry. Connell adds’ “investment banks have shown an extraordinary capacity to reinvent themselves following the many crises and changes that have affected the industry since the Great Depression”. In the longer term, the outlook for investment banks and brokers should brighten as the economy recovers and investors rediscover equities. Having trimmed their balance sheets, cut staff and restructured their operations, investment banks should be well placed to capitalise on this. IBISWorld forecasts revenue will increase to growth over the next five years to 2017-18.
The Investment Banking & Securities Brokerage industry has a low level of market share concentration. The demise of a number of firms such as Royal Bank of Scotland due to the financial crisis has driven an increase in concentration. The major companies include Barclays and Goldman Sachs.
For more information on the Investment Banking & Securities Brokerage industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Investment banks and brokers act as intermediary between those wishing to raise capital (the sell side) and those able to provide it (the buy side), and facilitate the secondary trading of securities. Services to the sell side include underwriting capital raisings, and advising on mergers and acquisitions. Services to the buy side include research and trade execution. Investment banks also undertake proprietary trading on their own account.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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