Market Insights Financial Corporate Finance

Investment Banking - Europe

Europe

The revenue in the Investment Banking market is projected to reach US$72.84bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 0.90% resulting in a projected total amount of US$76.18bn by 2029.
From a global comparison perspective, it is shown that the highest revenue is reached in the United States (US$130.10bn in 2024).

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Currency

Analyst Opinion

The Investment Banking market depicts a strong emphasis on sustainability, a requirement for flexible risk management, and a swift adoption of digital advancements. The ability to adapt to shifting global policies, keeping a vigilant eye on geopolitical shifts, and adeptly handling currency fluctuations are essential skills for investors maneuvering through this dynamic environment.

Trends on the market:

Sustainability and ESG Focus: The Investment Banking market continues to witness a profound shift towards sustainability and ESG (Environmental, Social, and Governance) considerations. Companies, investors, and regulators are increasingly emphasizing sustainable practices, influencing deal structures and investment decisions.
Volatility and Risk Management: Heightened volatility persists as a defining characteristic of the Global Investment Banking landscape. Geopolitical uncertainties, economic fluctuations, and unforeseen events necessitate rigorous risk management. Robust hedging strategies and diversification remain fundamental for safeguarding portfolios.
Digitization and Technology Adoption: The pace of digitization and technology adoption in the Investment Banking sector accelerates. Fintech partnerships, blockchain applications, and advanced analytics are reshaping operational models. Adapting to these innovations is crucial for maintaining competitiveness and efficiency.

Underlying Indicators:

Global Policies: Regulatory shifts, tax reforms, and trade agreements play a pivotal role in shaping deal structures and cross-border transactions. Staying attuned to evolving policies is essential for strategic decision-making.
Geopolitical Events: Trade tensions, political instability, and regional conflicts can impact investment strategies and market sentiment. A nuanced understanding of geopolitical dynamics is essential for managing risk and seizing opportunities.
Exchange Rates: Fluctuations in currency valuations can impact deal valuations, financing costs, and investment returns. Employing effective currency risk management tools is vital for mitigating exposure to exchange rate volatility.

Methodology

Data coverage:

Figures are based on the revenue generated by the Investment Banking market, as well as the transaction value, the number of transactions, and the average transactions size of the Mergers and Acquisitions (M&As) and Initial Public Offerings (IPOs) markets.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach and are based on a specific rationale for each market. As a basis for evaluating markets, we use market research and analysis, as well as data from annual financial reports. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus, such as GDP, wealth per capita, and total investment (% of GDP). This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita and total investment (% of GDP). The scenario analysis is based on a Monte Carlo simulation approach generating a range of possible outcomes by creating random variations in forecasted data points, based on assumptions about potential fluctuations in future values. By running numerous simulated scenarios, the model provides an estimated distribution of results, allowing for an analysis of likely ranges and confidence intervals around the forecast.

Additional Notes:

The market is updated twice per year in the event that market dynamics change.