Maybe it’s time to work for a non-US investment bank?

If you want a job at the pinnacle of banking, it’s long been the case that US investment banks have clustered at the top. They used to be called the bulge bracket – Bank of America, Citi, Goldman Sachs, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley – until the last financial crisis.  Those that survived are now more aptly known as the ‘top tier.’

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It’s not just a matter of perception. In the first quarter of 2025, data provider Dealogic says seven of the top ten banks for investment banking fees were American. Only three European banks – Barclays, Deutsche Bank and UBS – made the cut. Combined, those three European banks accounted for just 17% of the investment banking revenues generated by the top 10. Asian banks were entirely absent.

As US economic hegemony is jolted, though, things might change. Analysts are wondering whether US banks might receive a jolt too as clients favour local banks instead. The question was posed to banks’ senior executives in first quarter investor calls. Although tariffs aren’t being levied on banking services, the answers weren’t always entirely reassuring.

Jamie Dimon, for example, said on Friday that JPMorgan will be in the “crosshairs” of the fallout from the trade war.  “Some clients in some countries will feel differently about American banks and we’ll just have to deal with that,” he reflected.

The question cropped up again yesterday in relation to Citi’s international business. Citi CEO Jane Fraser responded that Citi will be fine. Citi is effectively seen as a local bank in local markets, said Fraser. “Many of these markets around the world we’ve been in for over a century,” she declared. ”We are viewed as quasi local in most of these markets. Citi is not a bunch of suitcase bankers that fly in. We’re not transactional.”

If the trade war gathers pace, this perception may be tested. International banks have lost significant market share in the Chinese market in the past three years as tensions between China and the West have increased. Dealogic says six of the top ten investment banks in China were Chinese in the first quarter, along with all the top five. Bloomberg reported in March that local bankers have been moving to Chinese firms as a result. 

It’s not just banks that could feel the repercussions of the trade war. The Financial Times reports today that European and Canadian pension funds are becoming wary of investing in US private equity and private credit funds. Meanwhile, as the Euro emerges as a haven currency, European stocks look more resilient. 

Europe’s banks may want to make the most of this. At the very least, they might argue that their share prices are slightly more resilient to the tariff trauma. Citi’s stock is down 13.5% from its March peak; Deutsche’s is down 11.9%. Deferred bonuses might just be better-off parked at DB for a while.

Photo by Lucas Sankey on Unsplash

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