Best Execution
  • Home
  • Publication

    Best Execution

    • Current issue
    • Back issues
    • Profiles
    • Viewpoint
    • Market Opinion
    • Supplements
  • Topics

    Topics

    • Equities Trading
    • Fixed Income Trading
    • Derivatives Trading
    • FX – Foreign Exchange
    • Post-trade
  • Partners
  • Listings
  • Awards

    European Women in Finance Awards

    • European Women in Finance – The Programme
    • European Women in Finance – The Winners
  • Events
  • About us

    About us

    • Marketing
    • Media info
    • Contact
  • Newsletter
  • Login
  • Home
  • Publication
    • Current issue
    • Back issues
    • Profiles
    • Viewpoint
    • Market Opinion
    • Supplements
  • Topics
    • Equities Trading
    • Fixed Income Trading
    • Derivatives Trading
    • FX – Foreign Exchange
    • Post-trade
  • Partners
  • Listings
  • Awards
    • European Women in Finance – The Programme
    • European Women in Finance – The Winners
  • Events
  • About us
    • Marketing
    • Media info
    • Contact
  • Newsletter
  • Login
HomeNewsGlobal investment banks not expected to hit the hi ...
Previous Next

Global investment banks not expected to hit the high revenue levels of 2021

Posted by: Lynn Strongin Dodds, January 6, 2021
Tweet
Share
Share
Pin
0 Shares
Michael Turner, head of CIB analytics at Coalition.
Michael Turner, head of CIB analytics at Coalition.

Covid induced volatility and trading levels fuelled record breaking revenues for the world’s largest investment banks last year but the surge is unlikely to be replicated in 2021 unless markets experience spikes of volatility similar to 2020’s, according to S&P Ratings research.

The analysts noted that fixed income, currencies and commodities, or FICC, trading revenue, which was the main driver of overall revenue growth at these behemoths has already started to normalise from the all time growth levels booked in the first half of 2020.

 

All 13 banks tracked by S&P Global Market Intelligence, registered double-digit declines in third quarter FICC revenue from the second quarter, with 10 booking decreases of more than 30%.

The data shows that Goldman Sachs Group reported the biggest quarter-over-quarter FICC drop, at 40.92%. Overall, there were quarter-over-quarter falls in total revenue at 10 of the 13 banks, with UBS, Société Générale and Natixis being the exceptions.

The fourth quarter was mixed, with October activity roughly replicating third-quarter levels, before picking up in November thanks to the US election and positive Covid vaccine news. However, levels fell again in early December.

The S&P analysts cite Michael Turner, head of CIB analytics at Coalition who attributed this to many “buyside clients locking in their returns for the year” and looking to ride out the market by 2020-end.

Given ongoing uncertainty due to geopolitics and the pandemic’s trajectory, Turner said 2021 will not be smooth sailing although Coalition’s base case scenario is for a “modest continual improvement” in the economy with interest rates remaining low and a smooth vaccine rollout.

For investment bank revenue, trading dynamics across products are expected to change from 2020 as economies recover and market volatility eases. However, while 2021 revenue will fall year over year, he expects that overall, it will be above 2019 levels.

Macro-heavy banks, some of which booked FICC revenue growth of 50% to 70% in the first nine months last year, boosted by bouts of volatility in flow rates and foreign exchange, will probably experience a sharper revenue decline year over year, falling faster in second half of 2021, said Turner.  Revenue at credit-heavy banks is likely to be more resilient as credit revenue improves in the second half of this year.

©BestExecution 2020

Back to Top

0

Tags: Coalition, FICC, Goldman Sachs, investment banks, Michael Turner, S&P Global Market Intelligence, Societe Generale, trading, UBS

Share!
Tweet

Lynn Strongin Dodds

About the author
mm

Related Posts

ISDA paper shows OTC derivatives weathered pandemic storm

ISDA paper shows OTC derivatives weathered pandemic storm

The stream of regulatory reforms such as Dodd Frank and European Market Infrastructure Regulati ...
People: Chris McConville new sellside chair at Plato

People: Chris McConville new sellside chair at Plato

Plato Appoints UBS’ Chris McConville as New Sellside Chair. Plato Partnership, the not-for-prof ...
SIX Group joins forces with Custodigit to launch institutional digit asset gateway

SIX Group joins forces with Custodigit to launch institutional digit asset gateway

The Swiss Stock Exchange will take a major stake in Custodigit, the joint venture created by te ...
European Women in Finance : Michelle Rodrigues : Keeping ahead of the curve

European Women in Finance : Michelle Rodrigues : Keeping ahead of the curve

Lynn Strongin Dodds talks to Michelle Rodrigues, General Counsel, Instinet Europe about MiFID, ...

Leave a Reply Cancel reply

You must be logged in to post a comment.

Subscribe for Email Updates

Best Execution
Recent
  • City jobs hit by pandemic and Brexit

    City jobs hit by pandemic and Brexit

    January 18, 2021
    ISDA paper shows OTC derivatives weathered pandemic storm

    ISDA paper shows OTC derivatives weathered pandemi ...

    January 15, 2021
    DTCC paper on the repercussions of Covid for FMIs

    DTCC paper on the repercussions of Covid for FMIs

    January 13, 2021
    Sad announcement of the death of Andrew Edwards. CEO of Saxo Capital Markets

    Sad announcement of the death of Andrew Edwards. C ...

    January 13, 2021
    People: Chris McConville new sellside chair at Plato

    People: Chris McConville new sellside chair at Pla ...

    January 13, 2021

Menu

  • Home
  • Publication
  • Topics
  • Events
  • Partners
  • Listings
  • Privacy notice
  • About us

Best Execution

In these uncertain times and as the tide of regulation rises ever higher and wider, Best Execution offers an in-depth analysis into the major trends that are shaping the financial services industry as well as providing a more detailed insight into the technology driving new products and services being developed to meet these challenges.

Where the buyside and sellside meet.

Wikipedia: Best Execution

Social

linkedin
Newsletter Sign Up
Copyright © 2020 Best Execution | Site by Refractiv.
  • Home
  • Publication
  • Events
  • Privacy notice
  • Login