Investment Banking Market Report 2025

The investment banking market size has grown strongly in recent years. It will grow from $139.86 billion in 2024 to $151.01 billion in 2025 at a compound annual growth rate (CAGR) of 8%. The growth in the historic period can be attributed to geopolitical stability and instability, industry consolidation, financial deregulation, development of derivatives markets, emergence of private equity.

The investment banking market size is expected to see strong growth in the next few years. It will grow to $203.65 billion in 2029 at a compound annual growth rate (CAGR) of 7.8%. The growth in the forecast period can be attributed to sustainable finance and esg integration, resilience planning and risk management, digital asset and cryptocurrency services, focus on infrastructure investments, continued private equity activity. Major trends in the forecast period include technology integration, digital currencies and fintech collaboration, flexible work models, alternative capital raising strategies, data analytics and artificial intelligence.

The investment banking market is poised for growth, propelled by factors such as the global economic expansion and the rise in capital requirements. In the context of a business cycle characterized by increased economic activity, including rising GDP, higher employment rates, increased consumer spending, and improved business confidence, investment banks stand to benefit. The demand for financial services, such as M&A, fundraising, and advisory work, tends to surge during periods of economic prosperity. As per projections from The World Bank, the world economy is expected to grow by 1.7% in 2023 and further increase by 2.7% in 2024, indicating a positive trajectory for the investment banking market.

The growth of the investment banking market is driven by an increase in capital requirements. These requirements, set by financial authorities, mandate the minimum amount of capital that banks must hold to ensure financial stability and protect various stakeholders. Faced with heightened capital requirements, banks actively seek advisory services to optimize their capital structures. Investment banks play a crucial role in facilitating capital-raising efforts, contributing significantly to revenue expansion. According to data from The European Central Bank, the average overall capital requirements and guidance in Common Equity Tier 1 (CET1) increased to around 10.7% of RWA for 2023, up from 10.4% in 2022. The upward trend in capital requirements is a key driver for the growth of the investment banking market.

Globally, investment banks are strategically transitioning towards business activities that demand less regulatory capital. Several prominent investment banks, including Barclays, Deutsche Bank, and Credit Suisse, have outlined their intentions to pivot away from traditional underwriting businesses. Instead, they are focusing on activities such as mergers and acquisitions advisory and fundraising. This strategic shift is a response to regulatory changes that have altered the cost dynamics of various investment banking activities. Some of these regulatory adjustments have led certain banks to specialize in specific areas due to limitations, while others, such as Citibank and JPMorgan, have opted to maintain a comprehensive range of investment banking services despite the evolving regulatory landscape.

Leading companies in the investment banking market are leveraging technologically advanced AI-driven platforms to address the evolving needs of consumers and enhance their global market presence. These AI-driven investment banking platforms utilize artificial intelligence (AI) and machine learning to optimize various banking operations. A notable example is Wells Fargo & Company, a prominent US-based financial services company, which introduced Vantage in December 2022. Vantage is a digital banking platform designed to efficiently serve commercial, corporate, and investment banking clients. Positioned as a comprehensive digital banking solution, Vantage consolidates Wells Fargo's diverse financial offerings into a unified platform. Leveraging the capabilities of AI and ML, the platform is crafted to align with the consumer-centric demands of corporate treasurers and small and medium-sized enterprises (SMEs).

The investment banking sector is actively pursuing mergers and acquisitions (M&A) as a strategic approach to broaden its product portfolio and expand market share. This involves larger investment banking firms acquiring boutique firms specialized in specific industries such as technology, healthcare, finance, media, and entertainment. The presence of numerous small firms focusing on niche markets presents significant opportunities for larger investment banking entities, driving increased M&A activity in the industry. This strategic approach allows investment banks to enhance their offerings and strengthen their market presence.

Major companies operating in the investment banking market include JPMorgan Chase & Co., Bank of America Corporation, HSBC Holdings plc, Citigroup Inc., Wells Fargo & Company, Morgan Stanley, BNP Paribas SA, Goldman Sachs Group Inc., UBS Group AG, Barclays plc, Deutsche Bank AG, Credit Suisse Group AG, Mizuho Financial Group Inc., Raymond James Financial Inc., Nomura Holdings Inc., Jefferies Financial Group Inc., Stifel Financial Corp., Lazard Ltd., Evercore Inc., RBC Capital Markets, Houlihan Lokey Inc., Cowen Inc., Piper Sandler Companies, William Blair & Company LLC, PJT Partners Inc., Moelis & Company, Perella Weinberg Partners LP, Greenhill & Co. Inc., Centerview Partners LLC, Rothschild & Co.

North America was the largest region in the investment banking market in 2024. Asia-Pacific was the second-largest region in the investment banking market. The regions covered in the investment banking market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the investment banking market report are Australia, China, India, Indonesia, Japan, South Korea, Bangladesh, Thailand, Vietnam, Malaysia, Singapore, Philippines, Hong Kong, New Zealand, USA, Canada, Mexico, Brazil, Chile, Argentina, Colombia, Peru, France, Germany, UK, Austria, Belgium, Denmark, Finland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Russia, Czech Republic, Poland, Romania, Ukraine, Saudi Arabia, Israel, Iran, Turkey, UAE, Egypt, Nigeria, South Africa.

Investment banking, a division within financial institutions, offers financial advisory services such as underwriting for capital raising and providing guidance in mergers and acquisitions (M&A) to governments, corporations, and institutions.

The primary types include mergers and acquisitions advisory, financial sponsor/syndicated loans, equity capital markets underwriting, and debt capital markets underwriting. M&A consultants advise buy-side and sell-side businesses on their M&A activities, conducting market research and aiding in raising finance for such endeavors. This service is utilized across various industries, including financial services, retail, wholesale, information technology, manufacturing, healthcare, construction, and more, catering to large, medium, and small enterprises.

The investment banking market research report is one of a series of new reports that provides investment banking market statistics, including the investment banking industry's global market size, regional shares, competitors with an investment banking market share, detailed investment banking market segments, market trends and opportunities, and any further data you may need to thrive in the investment banking industry. This investment banking market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The investment banking market consists of revenues earned by entities by undertaking capital risk in the process of underwriting securities. The market size is the revenues generated from the fees and commissions levied on the services provided. This market excludes companies acting as agents and/or brokers between buyers and sellers of securities and commodities. These establishments primarily underwrite, originate, and/or maintain markets for issue of securities as well as offering other corporate finance services. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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