The Global Merchant Banking Services Market size is expected to reach $122.4 billion by 2029, rising at a market growth of 17.4% CAGR during the forecast period.
Asia Pacific is one of the major contributors to merchant banking services because of the rising income levels, favorable demographics, and expanding local enterprises might be used as justifications for the growth. Consequently, APAC is expected to witness more than 29% share if the market by 2029. Foreign direct investments in greenfield projects in the region increased significantly in 2021, according to the Foreign Direct Investment (FDI) Annual Report. Famous merchant banking service suppliers have increased their offerings in Asia Pacific after spotting growth potential.
The major strategies followed by the market participants are Partnerships as the key developmental strategy to keep pace with the changing demands of end users. For instance, In April, 2023, RBC partnered with Conquest Planning to transform financial planning by offering customized and convenient advice. Under this partnership, RBC would bring next-generation financial planning ability to its financial planners and clients. Additionally, In February, 2023, DBS Bank India came into partnership with eSamudaay to meet the requirements of SMEs and MSMEs and at the same time conduct business via Open Network for Digital Commerce and broaden its digital solutions across traditional banking.
Based on the Analysis presented in the KBV Cardinal matrix; JPMorgan Chase & Co. and The Bank of America Corporation are the forerunners in the Market. In March, 2022, Bank of America extended its agreement with Alaska Air Group Inc., a U.S.-based airline holding company. This agreement solidifies a partnership that meaningfully broadened guest benefits and boosted both Bank of America and Alaska Air Group’s strategic growth plans in Crucial West Coast regions. Companies such as DBS Bank Ltd., Morgan Stanley & Co. LLC, HSBC Holdings plc, and Royal Bank of Canada are some of the key innovators in Market.
According to the Investment Trends Monitor report that was published by United Nations Conference on Trade and Development (UNCTAD) in January, global foreign direct investment (FDI) volumes displayed a strong rebound in 2021. The values climbed to 77% to a predicted $1.65 trillion than $929 billion in 2020 and exceeding their level prior to the COVID-19. The increase in investment flows to developing nations is positive. By far, the largest increase was seen in developed nations, with FDI reaching a projected $777 billion in 2021 - three times the abnormally low amount in 2020. Therefore, the growing flow of FDI is beneficial for the growth of the market.
Every business decision has a financial impact, and any choice involving money usage falls under the corporate financial decision category. The most efficient method of acquiring and employing financial resources is through corporate finance. Controlling the necessary cash and the sources of those funds is an essential part of managing a company's finances. Corporate finance divisions are in charge of directing and supervising their companies' financial operations and capital investment choices. These choices range from whether to proceed with a proposed investment to how to finance it-with equity, debt, or both-and whether shareholders should be paid dividends. Therefore, the market will expand as more companies expand their capital investments.
The high expenses connected with merchant banking services make them expensive compared to traditional banking services. Utilizing merchant banks carries several hazards, chief among them the possibility of conflicts of interest, the expense of doing so, and the complexity of such services. Merchant banks typically require significant capital to execute their activities. They may need to deploy substantial funds for underwriting commitments, investments, and financing arrangements. Capital-intensive operations entail costs associated with capital maintenance, liquidity management, and risk management, contributing to the overall cost structure. Hence, the high cost of these services is the primary factor hampering the market's growth.
Based on type, the market is characterized into portfolio management, business restructuring, credit syndication, and others. The business restructuring segment garnered the highest revenue share in the market in 2022. In order to increase a company's operational effectiveness and financial position, restructuring entails dramatically modifying its operations, structure, or finance. The need for corporate restructuring to enhance operations, save expenses, and boost efficiency is on the rise, which can be linked to the segment's expansion. In order to better align management and operations with company strategies and modify them to produce more profits, business restructuring services are used.
On the basis of provider, the market is classified into banks and non-banking institutions. The banks segment acquired the largest revenue share in the market in 2022. The size of operations plays a major role in the banking segment's supremacy. Investors banks frequently carry out such operations in an ideal manner to optimize return on investments due to the trust factor associated with significant names as well as their ability to allocate funds and resources. Furthermore, there are fewer options for oversight, and banks are governed by strict laws.
By end-user, the market is divided into businesses and individuals. The individuals segment garnered a remarkable growth rate in the market in 2022. Merchant banks mostly offer portfolio management services to high-net-worth individuals. One of their main duties is to buy and sell the underlying securities in the portfolios while adjusting to market circumstances (market timing). In addition, building and executing investment strategies to achieve specific investment objectives might be credited with the segment's growth.
| Report Attribute | Details |
|---|---|
| Market size value in 2022 | USD 40.5 Billion |
| Market size forecast in 2029 | USD 122.4 Billion |
| Base Year | 2022 |
| Historical Period | 2019 to 2021 |
| Forecast Period | 2023 to 2029 |
| Revenue Growth Rate | CAGR of 17.4% from 2023 to 2029 |
| Number of Pages | 207 |
| Number of Table | 343 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Companies Strategic Developments, Company Profiling |
| Segments covered | Provider, Type, End-user, Region |
| Country scope | US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria |
| Growth Drivers |
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| Restraints |
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Region wise, the market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America segment procured the highest revenue share in the market in 2022. Major merchant banking service providers are present throughout the region, which is expected to stimulate industry expansion. Local businesses also look to expand into new markets. The industry is also anticipated to grow due to a robust capital market and corporate environment.
Free Valuable Insights: Global Merchant Banking Services Market size to reach USD 122.4 Billion by 2029
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include JPMorgan Chase & Co., The Bank of America Corporation, DBS Bank Ltd., Morgan Stanley & Co. LLC, HSBC Holdings plc, Royal Bank of Canada, BERENBERG, LAZARD LTD, U.S. Capital Wealth Advisors, LLC and Bryant Park Capital.
By Provider
By End-User
By Type
By Geography
The Market size is projected to reach USD 122.4 billion by 2029.
Expansion of corporate financing operations are driving the Market in coming years, however, High cost of merchant banking services restraints the growth of the Market.
JPMorgan Chase & Co., The Bank of America Corporation, DBS Bank Ltd., Morgan Stanley & Co. LLC, HSBC Holdings plc, Royal Bank of Canada, BERENBERG, LAZARD LTD, U.S. Capital Wealth Advisors, LLC and Bryant Park Capital.
The expected CAGR of this Market is 17.4% from 2023 to 2029.
The Businesses segment is leading the Market by End-user in 2022 thereby, achieving a market value of $81.1 billion by 2029.
The North America market dominated the Market by Region in 2022 and would continue to be a dominant market till 2029; thereby, achieving a market value of $40.3 billion by 2029.
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