Global investment banks face a tough 2022

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Wall Street analysts expect earnings for five of the biggest US investment banks to decline 22.9%

A Wall Street sign outside the New York Stock Exchange in New York City, New York, US. File photo: REUTERS/CARLO ALLEGRI

“IPOs are scarce, and Spacsare now about nonexistent,” said Stephen Biggar at Argus Research. “The second quarter is going to be another dismal quarter for investment banking.” Credit Suisse, which warned of a second-quarter loss, has its own problems as it suffered from billions in losses in 2021 via failed investments, plus the effects of multiple legal cases.“This is the year of Wall Street headwinds, Main Street tailwinds,” said Mike Mayo, senior banking analyst at Wells Fargo. He said trading should increase year over year but equity underwriting is under pressure.

The picture is uneven across segments. While broader M&A volumes are lower, overall activity has remained healthy and the pipeline for deals still looks relatively solid, according to investment bankers. While financial services recruiters say they are not seeing hiring freezes, some pointed to a noticeable slowdown in hiring trends from 2021’s lofty levels.

 

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