Bank chiefs face scramble to stay at the top table

Wed Nov 21, 2012 9:39am EST
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By Steve Slater and Sarah White

LONDON Nov 21 (Reuters) - There may be room for only a handful of firms at the top table of investment banking as the industry reshapes, leaving bosses scrambling to keep their seat and influence at the same time as they need to shrink.

Even the biggest global players have been cutting costs heavily in the face of a changing regulatory landscape that has caused a shift widely viewed as structural, rather than cyclical.

"By the time we are finished with the unintended consequences of regulation, my feeling is we will have five to six (global) banks remaining," Anshu Jain, Deutsche Bank's chief executive, said on Wednesday.

Others share that view. Tougher regulations and shaky markets have forced all banks to streamline, and the shakeout is expected to relegate many to a second tier that lacks the scale to compete and needs to narrow its focus to be profitable.

"It will be ever more minnows and whales," said Peter Hahn, of Cass Business School's finance department. "Some will be rubbing their hands with glee to see rivals pull back, and if there used to be 20 banks that wanted to be in the top five, there are now maybe eight. But it is still more than five."

Wall Street powerhouses will take the majority of the top slots, bankers and analysts predict.

BIG DECISIONS   Continued...