Although jobs in capital markets continue to be slashed on a regular basis, investment banking is about to make a comeback, according to Bloomberg Magazine’s April issue.
Since 2008, M&A deal volume has slumped, the industry has seen broad pay cuts, huge amounts of new regulation and has often been derided by the public (alla Occupy Wall Street), but investment banking is on the verge of a comeback, according to Bloomberg’s data.
This year has already seen several big M&A deals. Dell and private-equity firm Silver Lake Management LLC agreed last month to take Dell Inc. private for $24.4 billion ,in the biggest leveraged buyout since 2007. A few days later, Warren Buffett announced he would partner with Brazilian billionaire Jorge Paulo Lemann to buy H.J. Heinz Co. in a $23 billion deal.
“I hesitate to be the one that says 2013 will be the year, because invariably it may not,” says Christian Meissner, BofA’s head of global corporate and investment banking, told Bloomberg. “But I think that we’re pretty close to it changing."
Meanwhile, JPMorgan was No. 1 in the Bloomberg 20, Bloomberg Markets’ ninth annual ranking of the best-paid investment banks measured by the fees they earn. The bank took in $3.97 billion in fees last year, a 24.8 percent increase over 2011.
All this news is surely giving CEO Jamie Dimon even more reason to smile - if he ever needed it.
In an exchange with an analyst that Rolling Stone’s Matt Taibbi calls “priceless,” Dimon had an unexpected quip after being asked about banks’ capital ratios.
Taibbi points out that Dimon's first instinct is to misinterpret analyt Mike Mayo's question, while also admitting that his bank has a lower capital ratio than UBS.
“So Dimon thinks he's pushing Mayo around, and thinking he's a big tough guy doing it, but actually he's just helping Mayo make his point,” says Taibbi.
“It's classic,” he adds.