Goldman Sachs and JPMorgan are among the top 5 investment banks in the U.S, whose business model has witnessed significant changes over the last decade.Goldman Sachs has transformed itself from an Investment Bank heavily focused on securities trading to a bank holding company with diversified streams of revenues like Asset & Wealth Management and Investing & Lending. It has the highest investment banking revenues among its peers and it is expected to retain the #1 position over the foreseeable future thanks to its unrivaled strength in the global Merger & Acquisition (M&A) advisory industry.On the other hand, JPMorgan’s business model has witnessed several changes as it reduced its dependence on Sales and Trading and shifted its focus towards core banking. Further, its investment banking business has contributed around 7% of revenue share over the last decade, while maintaining its leadership in the debt origination market. In this dashboard, Trefis compares key operating metrics for the investment banking business of Goldman Sachs and JPMorgan over the last few years.
Although Goldman Sachs has a larger investment banking business both in terms of M&A advisory and equity underwriting deal volume, it is trailing JPMorgan in debt origination space.Further, JPMorgan has generated more fees income per dollar of equity underwriting deal volume. On the other hand, Goldman has delivered better returns on debt origination and M&A advisory fees income per dollar of deal volume.JPMorgan has diversified revenues streams with investment banking business contributing almost 7% of total revenues over the last decade. On the other hand, Goldman Sachs is more dependent on investment banking business which accounted for more than 18% of its revenues.Moreover, the difference in investment banking revenues of both the banks is not huge, and given JPMorgan’s lead in debt origination space coupled with a better return on equity underwriting fees income, JPMorgan could cross Goldman Sachs' scale over the foreseeable future.