Direct Answer
17 SEC filers are classified under the Standard Industrial Classification code that describes the investment banks industry, and their latest annual reports show $261.8 billion of combined revenue and a median operating margin of 12.9%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Investment banks advise corporations and governments on mergers and financing, underwrite stock and bond sales, and run trading and research. Fee income swings with deal cycles and market conditions. The first numbers to compare across companies here are advisory fees, equity and debt underwriting and trading revenue.
Key Industry Metrics
- Advisory fees: Fees from merger, acquisition and restructuring advice. They are recognized when deals complete, so they follow corporate confidence.
- Equity and debt underwriting: Fees from helping companies sell stock and bonds. They follow issuance windows, which open and shut with markets.
- Trading revenue: Income from market-making and client trading across stocks, bonds and currencies. It rises with volatility and volume.
- Compensation ratio: Staff pay as a share of revenue. It shows how much income goes to employees, and shifts with revenue rather than headcount.
- Return on tangible equity: Profit relative to equity excluding intangibles. It is a stricter return measure that adjusts for acquired goodwill.
Primary Macro Drivers
- Mergers and acquisitions volume: When companies pursue deals, advisory fees rise, so merger volumes drive advisory fees and backlog.
- Capital markets issuance: Debt and equity issuance depends on market conditions, so issuance volume moves underwriting revenue.
- Market volatility: Volatility raises client trading, though it can also raise risk, shown in trading revenue.
- Interest rates: Rates change financing costs and valuations, which influence deals, trading and interest income.
Major Risks
- Cyclical deal flow: Fee income can drop sharply when deals are postponed. Watch advisory fees, underwriting revenue and backlog.
- Trading and market risk: Large positions can lose money quickly in volatile or illiquid markets. Watch trading revenue variability and risk measures.
- Regulatory capital: Capital rules limit balance sheet size and risk, affecting returns. Watch capital ratios and return on tangible equity.
- Compensation inflation: Competition for bankers pushes up pay, reducing margins in weak revenue years. Watch the compensation ratio.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Cyclical |
| Capital Intensity | High |
| Regulatory Intensity | High |
| Industry Maturity | Mature |
| Geographic Importance | Global |
Investment Banks Filers in the SEC Record
17 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification code 6211. Their latest fiscal years end in 2025, and together they reported $261.8 billion of revenue. Median revenue growth over the prior year was 19.6%. Median operating margin was 12.9% and median net margin 10.2%. Median total liabilities were 81% of total assets, and 14 of 17 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Morgan Stanley | $70.6 billion | 14.4% | n/a | 23.9% | FY 2025 |
| Galaxy Digital Inc. | $60.4 billion | 41.8% | n/a | -0.4% | FY 2025 |
| Goldman Sachs Group Inc | $58.3 billion | 8.9% | n/a | 29.5% | FY 2025 |
| Blackrock, Inc. | $24.2 billion | 89.3% | 29.1% | 22.9% | FY 2025 |
| Raymond James Financial Inc | $15.9 billion | 6.6% | n/a | 13.4% | FY 2025 |
| Jefferies Financial Group Inc. | $10.8 billion | 2.9% | n/a | 6.3% | FY 2025 |
| Stifel Financial Corp | $6.3 billion | 6.7% | n/a | 10.2% | FY 2025 |
| Robinhood Markets, Inc. | $4.5 billion | 51.6% | n/a | 42.1% | FY 2025 |
The 8 largest of 17 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Investment Banks guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Investment Banks industry?
Key performance indicators for the Investment Banks industry include: Advisory fees, Equity and debt underwriting, Trading revenue, Compensation ratio, Return on tangible equity. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Investment Banks industry?
The Investment Banks industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing.
What are the biggest risks in the Investment Banks industry?
The primary risks for Investment Banks companies include: Cyclical deal flow, Trading and market risk, Regulatory capital, Compensation inflation. Investors should assess each company's exposure to these factors and its track record of navigating them.