JPMorgan’s crisis lead appears to have vanished
By Rolfe Winkler and Antony Currie
JPMorgan’s crisis lead appears to have vanished. Jamie Dimon’s investment bank was crowned king of the downturn. Last year, it sat atop the debt and equity underwriting league tables, and was number two in merger work. But it looks as though the edge is proving hard to keep.
JPMorgan’s market share in all three advisory businesses dipped in the first quarter of 2010, and not just from the same period last year, according to Thomson Reuters. More noticeably, they’ve fallen or stayed flat since the peak of the boom.
The damage firms like Citigroup and Merrill Lynch inflicted on themselves certainly helped JPMorgan solidify its position. Citi’s share of debt underwriting — a traditional strength — has dropped 4.5 percentage points since first quarter 2007. Bank of America Merrill Lynch has lost 9 percentage points of market share in M&A.
But while rivals’ slides have slowed or stopped, JPMorgan’s started in the first quarter. In debt underwriting, it fell back to fourth place — and the same 8 percent market share it held in 2007. Dimon’s equity underwriting team has shed much of the business it held when conditions were at their worst. And the huge percentage of share JPMorgan snatched in the shrunken crisis M&A market has all been given back.
It’s not exactly a disaster just yet. This is only one quarter’s worth of data. Plus, JPMorgan is still top dog in equities. And it was just $14 billion behind BofA Merrill in the $1.5 trillion worth of debt capital markets activity for the quarter.
Still, the figures show how hard it is to stay ahead. JPMorgan’s ability to lend, relatively solid earnings and good press will only go so far. Clients ideally want a choice of middle-men with whom to work. Some may still be grumpy about having had only JPMorgan to turn to in the tough times, when the bank had the opportunity to stand firm on fees.
With the worst of the crisis apparently behind, Dimon’s fortress balance sheet has some competition. And judging by the first-quarter numbers, his rivals are coming back fighting.