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YEAR 2000 WINNERS
OVERALL LEHMAN BROTHERS
COMMERCIAL BANKS FLEETBOSTON
THRIFTS CHARTER ONE
BROKER/DEALERS LEHMAN BROTHERS
SPECIALTY LENDERS CAPITAL ONE
This has been the era for investment banks and credit card lenders. For the past five years, they hvae thired more than any other type of banking company, racking up huge profits at breakneck speeds. Commercial banks, for the most part, have been left in the dust.
Though FleetBoston Financial Corp. comes in second on the one-year ranking, no commercial bank made a top showing over the longer run. None, for example, is among the top five on the five-year US. Banker ranking based on return on equity and growth of per-share earnings.
The winners over the five-year time period, from 1996 through 2000, are three investment banks and two credit card lenders. Morgan Stanley took first place, Charles Schwab Corp., second, and Merrill Lynch & Co., third. MBNA came in fourth, and Capital One Financial Corp., fifth.
The rankings broken down by industry can be found on our Web site at www.us-banker.com.
Some banks were close runnersup. Pittsburgh's PNC Financial Services Group took sixth place on the five-year ranking, and FleetBoston Financial Corp. came in sixth.
The question is whether the investment banks and specialty lenders will continue to lead the pack. There is strong evidence that investment banking is falling behind, although well-run specialty lenders seem to be holding their own.
Investment banks clearly have run into hard times this year because of a dearth of merger and acquisition activity and the collapse of the technology market, which means fewer initial public offerings.
Hints of a severe slowdown in the investment banking area are evident in the rankings, which are based on yearend 2000 numbers. (The raw numbers were supplied by SNL Securities.) Schwab, which is No. 1 on the three-year ranking, and No. 2 on the five-year, dropped sharply to No. 35 on the one-year tabulation. That's primarily because its growth in pershare earnings was relatively poor. At 4%, it ranks only 56th in EPS growth.
Morgan Stanley, too, lost ground, dropping to the No. 8 spot on the one-year ranking, down from No. 3 on the three-year and No. 1 on the five-year.
But Lehman Brothers Holdings maintained its strong...