Theme: Correlating RQ and risk management
Correlating RQ and risk management Recent academic research suggests that measuring “RQ” as opposed to “IQ” may give a better guide to subconscious decision-making in risk management. We compare the number of self-proclaimed “Heads” among banks’ total staff and banks’ share price movement during the original ‘Credit Crunch’.
Theme: EU bonus cap
EU bonus cap The EU Parliament’s proposal to impose a 1:1 bonus:salary ratio for ‘bankers’ is not merely pointless. Ignoring great changes that banks have already made in aligning their pay with market conditions, it damages banks’ ability to adjust their cost structures to inevitable revenue fluctuations and sidelines stakeholders that are rightly tasked with […]
Sector: Capital Markets 4Q12 Initial View
Tricumen publishes its Capital Markets Initial View for 4Q12/FY12 reporting season, comprising aggregated high-level analysis of product revenue and headcount for the world’s 11 leading Investment Banks. Highlights: In turbulent markets, the Top 11 capital markets players featured in this report actually increased their FY12 revenue by 5%, from $168bn in FY11 to $178bn in FY12. A […]
Banks: Deutsche Bank 4Q12 reorganisation
Deutsche Bank 4Q12 reorganisation The 4Q12 reorganisation substantially elevated CB&S reported profitability by shifting a large portion of litigation expenses to NCOU; and … … moving an ETF business with weak profitability into the newly integrated AWM division.
Theme: Commodity Trading Gets Physical
Commodity Trading Gets Physical Dodd-Frank and the actions of regulators are turning banks away from the US energy derivatives market. Since the start of 2011, Tricumen’s Energy Client Flow Index (CFIndex) has fallen by 20% … … while the volume of metals traded has grown at a compound annual growth rate of 17%. The combined […]
Theme: Credit Where Credit’s Due
Credit Where Credit’s Due While overall bond trading inventories are down, there is considerable variance across the market. Using four of our core US banks as an example, GS and JPM have significantly increased their balance sheet holdings in the past year, in contrast to Citi and MS. CDS holdings have followed a different trajectory, […]
Theme: CMBS, CRAs and CRA3
CMBS, CRAs and CRA3 A recent CMBS conduit issue by JP Morgan prompted a rather unusual action from Moody’s. To ‘our’ banks – seeking to revive hitherto quiet markets – this may introduce an additional layer of uncertainty. The upcoming European ‘CRA3’ regulation is not likely to help; to us, some of the proposals appear fundamentally […]
Sector: Capital Markets 3Q12 Update
Capital Markets 3Q12 Update Tricumen publishes its Capital Market Results Update for 3Q12, comprising granular analysis of product revenue for the world’s leading Investment Banks.
Banks: UBS FICC restructuring
UBS FICC restructuring The strategic restructuring plan, announced yesterday, shone the spotlight on specific product areas; in this note, we focus on UBS’ strengths and opportunities in key client segments. Drawing on our ‘360-degree’ profitability work and on the basis of the information released thus far, we view UBS Investment Bank’s RoAE and cost/income targets […]
Theme: BIS Basel 3 regulatory consistency assessment
BIS Basel 3 regulatory consistency assessment The BIS preliminary report on the progress of the implementation of Basel 3 on capital requirements in the EU, the US and Japan drew sharp criticism from the European Commission. We find the BIS’ findings, on the whole, fair and measured. We have made no changes to our normalised RWA […]