EU Economics

Figures suggest British banks would be better off outside the EU after top five European investment banks were outstripped by their US counterparts on all major financial measures last year

  • Revenues of top five US banks more than double their European rivals
  • US banks made pre-tax profits of more than seven times Europeans
  • Experts say US banks adapted faster to changes in the industry 

In nearly all financial measures the American banks beat their European rivals, with revenues made by the top five US investment banks more than double brought in by the European operators.

The figures are likely to be jumped on by Brexit supporters as proof that British banks would be better off outside the EU and not subject to Brussels regulations.

Combined revenues made by the top five American banks were more than double brought in by their top five European counterparts last year 

The revenues of the top American investment banks in 2015 was £97billion – more than twice the £42billion earned by the top five European banks, according to analysis by the Financial Times.

The contrast was even more stark when it came to pre-tax profits, with the Americans reporting combined pre-tax profits of £23.5billion – more than seven times the cumulative £3billion pre-tax profits recorded by Europe’s top five investment banks.

European banks also saw their revenues fall significantly more than their American counterparts last year.

The top five American banks – JPMorgan, Citigroup, Morgan Stanley, Goldman Sachs and Bank of America – saw their combined revenues fall by 0.8 per cent.

But revenue across the top five European banks – Deutsche, Barclays, BNP Paribas, Credit Suisse and UBS fell by nearly 8 per cent.

Banking experts explained that US banks adapted to changes in their industry faster.

The profits made by Europe's five biggest investment banks were significantly outstripped by their top five American counterparts, new figures revealed today

Brad Hintz, a global investment banking professor at New York University Stern School of Business, told the FT: ‘No US bank clung tenaciously to bond trading like. No US bank completely reversed strategy like Barclays and and no US bank had to face Swiss capital rules like Credit Suisse.’

Other experts attributed the US banks’ superior performance to the decision by US authorities to force banks to restructure faster following the 2007 financial crash.

The likes of Credit Suisse, Barclays and Deutsche are only carrying out the necessary restructuring now, experts explained.

European banks are also finding their US banks are performing stronger in the us. John Langley, Barclays’ head of global finance and risk solutions, said his bank is performing so strong in the US that it is ‘closer to the US banking results for 2015 than the European ones’.

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