NEW YORK ( TheStreet) -- Love them or hate them, Goldman Sachs (GS - Get Report), Morgan Stanley (GS - Get Report) and other global investment banks have shown a remarkable capacity over the past few decades to come up with new ways to make money.
But those days are over, according to JPMorgan analyst Kian Abouhossein.
"We see no real innovation within the industry to create new products which will drive the growth story in
As a result, Abouhossein expects global investment banks -- a group that includes not just "pure-play" investment banking companies like Goldman and Morgan Stanley, but also diversified U.S. giants such as Citigroup (C - Get Report) and Bank of America (BAC - Get Report) as well as European players such as Deutsche Bank (DB), Barclays (BCS), UBS (UBS) and Credit Suisse (CS - Get Report) -- to split into winners and losers, with the losers massively scaling back their operations.But it is the losers, a group Abouhossein refers to as Tier II, that makes the better investment, because they are already well on their way to restructuring -- cutting staff and compensation, and returning capital to shareholders. Abouhossein singles out Credit Suisse and UBS as his top picks in Tier II, though he also includes Morgan Stanley in that group The eventual winners, according to Abouhossein, "will undertake limited restructuring at this point and hence will likely trade at a discount
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