Large corporate and investment banks deliver robust results in 2025 to date
Despite ongoing geopolitical pressures, an improving macroeconomic environment provided support to most corporate and investment banking businesses in the first half of 2025, according to research from Eurogroup Consulting.
Corporate and investment banks, which serve companies, institutions and governments rather than individual consumers, have had a robust year so far, benefiting from improvements in the corporate landscape, strong refinancing demand, a rebound in mergers and acquisitions, and sustained low interest rates.
Analysis by Eurogroup Consulting covering around 20 major corporate and investment banks (CIB) found that, across the board, revenues in both Q1 and Q2 were higher than in previous periods. This trend was observed across both European and North American banks.
Capital markets revenues rose by double digits year on year, while debt capital markets benefited from a refinancing boom driven by lower interest rates and strong corporate demand to extend maturities. Banks’ mergers and acquisitions franchises also experienced a rebound, led by large transactions above $1 billion, continued private equity dynamism and a revival in cross-border dealmaking. In the US, M&A volumes rose by nearly 15% year on year.
“Large banks in the CIB segment maintained strong financial performance in 2025, supported by an improving macroeconomic environment, resilient operating models and strategic adaptations to shifting market conditions,” Eurogroup Consulting noted in its research paper.
However, equity capital markets remained subdued, with IPO activity still weak, despite an expanding pipeline and early signs of recovery in SPACs. The authors also highlighted several challenges constraining further growth, including interest rate volatility weighing on valuations, increased instability in credit spreads and persistent weakness in European equity markets.
Banking performance
A deeper analysis of bank performance reveals notable divergence in operational outcomes across players. Examination of jaws and cost-to-income (C/I) ratios shows that a group of leading banks stand out on both metrics, with increasingly divergent trajectories emerging over the past two years.
A positive jaws ratio and a relatively low C/I ratio indicate effective cost management and strong revenue dynamics, while a negative jaws ratio combined with a high C/I ratio signals deteriorating efficiency.
Banks such as Citi, Goldman Sachs, Deutsche Bank and Barclays have been identified as leaders in efficiency and growth, all reporting positive jaws ratios (above +1.5%) and cost-to-income ratios close to or below 60%. This confirms their operational leverage and ability to translate growth into margin improvement.
“These banks stand out for their ability to combine strong cost discipline with positive revenue dynamics,” the authors noted.
A second group of banks has succeeded in maintaining relatively efficient cost bases, but without marked revenue acceleration or with only modest improvements in their jaws ratios. JPMorgan, BNP Paribas, Société Générale and Santander maintain C/I ratios between 45% and 63%, with jaws generally ranging from +0.15% to +0.91%. “Their performance reflects operational rigour, but limited top-line growth momentum, particularly in a subdued European market.”
A third group of banks lags behind, with cost pressures and/or revenue weakness weighing on performance. Morgan Stanley and UBS both face cost inflation, with cost-to-income ratios of 68% and 81% respectively. Morgan Stanley has slipped into slightly negative jaws (-0.09%), indicating that costs are now outpacing revenues.
ING, Natixis, ABN Amro, Crédit Agricole and BBVA face pronounced margin compression, with deeply negative jaws ratios reaching as low as -6.85%. Natixis and ING, in particular, contend with elevated cost-to-income ratios of 64% and 53%.
Structural shifts
The report also finds that structural shifts are reshaping corporate and investment banking.
Banking consolidation remains a defining theme. “The absorption of Credit Suisse by UBS stands out as the most emblematic transaction, while Deutsche Bank continues its internal reorganisation to reduce costs and simplify its business model. Barclays has also adjusted its positioning, scaling back in certain areas and focusing on more profitable segments.”
Alongside domestic restructuring, cross-border consolidation – long considered difficult in banking – has begun to re-emerge as part of a broader structural trend. The authors point to BNP Wealth Management’s acquisition of client portfolios from HSBC Private Banking in Germany and BNP Paribas Asset Management’s acquisition of AXA Investment Managers as illustrative examples.
“These moves can be interpreted as signs of a sector-wide search for scale, efficiency and competitiveness in an environment marked by margin pressure, regulatory complexity and digital transformation,” Eurogroup Consulting said.
AI in banking
Another area explored in the stufy is the rapid rise of artificial intelligence and generative AI in corporate and investment banking. The authors note that generative AI, in particular, is scaling rapidly, while more established applications of AI are already prevalent in areas such as compliance, operations and customer service.
In most cases, AI initiatives remain focused on cost savings, with use cases demonstrating efficiency gains of up to 25%. However, the return on investment on the revenue side remains less clear.
The report highlights how AI promises a new wave of improvements in decision-making, efficiency, insight generation and client operations, although obstacles remain around trust, governance and compliance. “Success will hinge on robust data governance, cross-functional collaboration and strong talent strategies, as people remain central to scaling AI effectively.”
