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Ummm... Did you actually read the article? Citi is the highest paid based on these criteria due to its debt underwriting business, which comes as a result of its balance sheet. Just going off of M&A advisory fees, Citi is number four, which isn't all that impressive given how many bankers it has under its roof and its ability to provide such a shitload of financing to clients.
LOL anybody who tries to argue FOR Citi is bound to get fucked
Can anyone explain to me how universal banks such as JPM, Citi use their balance sheets to issue debt? I've always heard that big balance sheet helps these banks when it comes to debt issuance. However, I never understood how it works in practice.
Also, #4 in M&A, #3 in equity (after GS/MS), and #1 in bonds for Citi are not bad at all. Clearly, these numbers are better than those of its competitors excluding GS/MS.
How come Lehman is behind CS in every single category?
Citi/JPM can underwrite more debt (and afford to take on more risk) because of their huge balance sheet.
Firms like Citi/JPM are strong in financing, which in turn can bring in M&A deals as well (stapled financing). That's their competitive advantage - leveraging their balance sheet.
Bear in mind that Lehman is weak on the global scale. It is only strong in the US, in Europe and Asia, its presence is small.
So how does it work in practice? Do Citi/JPM use their own money to issue debt?
Not entirely. Underwriting would mean that they incur the initial risk of buying over the debt, and then finding ways of getting the debt off their books by selling it at a higher price.
Citi/JPM can do higher volumes of underwriting because they can take on more risks and do more financing deals (buy more debt).
Makes sense. Thanks.
Citi is huge in terms of people as well, which is another reason why they're number four. Someone should research profitability per banker, as I believe that would be a much more accurate measure of the quality of the business and the experience one could get as an analyst there.
I never said that they were better than GS/MS. No matter what you say Citi is one of the best by far. Yes, a lot of its business does come from the commercial side, yes they do have a lot of bankers. Yet if you look at the total fees, ML, JPM, UBS, CS, DB, LB are not even close
Who cares about total fees, it's not like you get a part of it. They pay street and that's it. You can justify your job at Citi all you want but the fact is the exit opps coming from citi are worse than the other bbs.
I agree with Citi being a fee machine. But you have to consider they have more people on the ground too and they have an advantage when working with clients (balance). All I think everyone is saying is don't discount the revenue / banker metric when evaluating firms because it'll have a large bearing on how much deal flow you get to work on in your analyst stint.
Look at UBS for example -- top 5 M&A fees; but like somewhere between 6-8 or so in Thomson league tables. They tend to do a lot of sole advisory jobs for their big deals (ie. sole advisor to Univision; Harrah's (kinda had stephens on there); Petco. etc.
At the end of the day banking is a fee generating business and this should be the most important metric. League tables and size of deals are important as well to guage how often you can get on those industry changing deals.
Looking at these rankings should help you understand why some of the more senior guys on this board always talk about a certain group of banks being respected for advisory work even though they don't dominate league tables.
Citi is a decent bank regardless, less looked down upon than JPM, DB and BAS
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