The second McKinsey Global CIB 50, our annual ranking of the largest institutions in the world (by reported revenues), confirms that 2006 was a stunning year for all the leading corporate and investment banks. In a sector where Darwinian principles guide decision making, the results provide valuable information about the state of the industry beyond narrow business lines.

An analysis of the rankings reveals that the top 10 institutions have been growing at a faster pace than the rest of the pack. While the year-on-year revenue growth for the top 50 as a whole was an impressive 19 percent, up from 14 percent the previous year, the top tier enjoyed an average jump of 24 percent (Exhibit 1). Increases were fairly consistent across each of the middle three tiers, but the fifth tier (those ranked 41–50) lagged behind the others, with an average rise in revenues of 15 percent.

Upon closer examination, the research spotlights the driving force behind the largest players' outperformance—the record-breaking results stemming from capital markets activities.

Exhibit 2 isolates revenues by advisory, underwriting, and sales and trading for the top players in...