European banks grab market share from rivals
It's a reversal of fortune for European investment banks, which have been losing ground to their US peers since the 2008 financial crisis. An expected boom in US dealmaking this year has not materialised, as US president Donald Trump's policies have created uncertainty in the market.
Trump also announced back in April that he would impose steep import tariffs on US trading partners' goods. His 'Liberation Day' has already led to more deals being iced. The upheaval in the US has led to renewed optimism in Europe, with corporate embarking on deals and private equity firms looking further afield for investments.
'The shift from global investors to corporates to focus on the European market plays to our strengths in our home markets,' said Henrik Johnson, co-head of European investment banking at Deutsche Bank.
Renaud-Franck Falce, head of Global Capital markets at BNP Paribas, said the recent shift towards Europe being forced to stand on its own two feet is likely to lead to a surge in dealmaking in the region.
'Europe's push towards greater autonomy is expected to translate into an investment 'super cycle' requiring large financing solutions and to accelerate cross-boarder M&A within Europe,' he said. 'Broad access to capital markets, moderate leverage in corporate Europe and significant private equity dry powder will support such moves.'
Dealmakers had predicted a bumper 2025 fuelled by 'Trump 2.0', which would usher in a new business friendly era with light-touch M&A regulation. However, US policy has instead led to more protectionism and volatile market reaction has scuppered appetite for deals.
Investment banking fees are down globally by 4 per cent at $34.4bn so far in 2025, according to Dealogic. JPMorgan's chief executive Jamie Dimon signalled that dealmaking revenue could be down by mid-teen percentages in the second quarter. European investment banking fees are down by 12pc this year, despite the increase in optimism around activity.
JPMorgan added more than 300 people to its EU hub in 2024, with Paris the main beneficiary as it continues to hire in the French capital. The bank ended 2024 with 4,956 people within JPMorgan SE – the entity created to house its EU operations after Brexit – up to 307, according to its newly released annual report.
Like its rivals, JPMorgan has been bolstering its operations in the EU in recent years following the UK's formal exit from the bloc in 2020. The Wall Street bank expanded its Paris office by 105 people last year, the figure shows, an increase of 15 per cent compared with a year earlier.
BNP Paribas's Falce said: 'We fully anticipate dealmaking activity will increase in Europe, notably in sectors related to security, sustainability and electricity transmission, as well as digital infrastructure.'
Ready to fight giants: European banks dominated their home turfs before the 2008 financial crisis. Deutsche Bank and Barclays were among those that embarked on a quest to become global players and take on Wall Street giants in the US.
However, a prolonged period of low interest rates and a slower recovery from the crisis saw some European banks fall behind. Their share of the European investment banking fee pool has been slowly eroded since hitting a peak of 65 per cent in 2010, according to Dealogic numbers.
Andy Jalil
The writer is our foreign correspondent based in the UK
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