Theme: RWA dynamics FY11-FY14E
RWA dynamics FY11-FY14E European banks included in this note reduced their RWA much more aggressively than their US peers, and have enjoyed a far greater improvement in FY11-FY14E revenue/RWA, largely due to their faster adoption of Basel 3. In securitisation, credit and commodities, the key driver of RWA returns for US banks was revenue; Europeans, by […]
Tricumen supports PwC’s study commissioned by AFME
Tricumen supports PwC’s study commissioned by AFME Tricumen was recently asked to support a PricewaterhouseCoopers’s study commissioned by the Association for Financial Markets in Europe (AFME). The study, published in late November, considered the impact of the European Commission’s proposal for structural reform of the banking sector in the EU. We provided product-level data on […]
Banks: Credit Suisse Prime Service, IB targets and achievements
Credit Suisse: Prime Service, IB targets and achievements Credit Suisse is scaling down its Prime Services unit. The revenue impact may be minimal: the bank has a strong synthetic financing capability, which could be folded into equity derivatives. We disagree with the mainstream media’s unflattering coverage. CS’ cautious approach to restructuring is justified by the uncertain […]
Sector: Capital Markets: Results Review 3Q14
Capital Markets: Results Review 3Q14/9m14 Capital markets operating revenue at the Top 13 investment banks totalled $144bn at the end of 9m14, barely behind 9m13. During the three months of 3Q14, operating revenues reached $43bn, slightly ahead of 3Q13 as strong ECM, M&A, FX and rates offset falls in DCM and equities revenues. The decline […]
Joint venture with Strategic Metrics and enhanced Asia/Pacific coverage
Tricumen agrees joint venture with Strategic Metrics and launches enhanced Asia/Pacific coverage Tricumen today announces a joint venture with Strategic Metrics, a Singapore based firm providing consulting advice to global and regional financial services firms. The joint venture covers the provision of data, analysis and advice across capital markets, transaction banking and commercial banking. The […]
Sector: Capital Markets: Results Review 2Q14
Capital Markets: Results Review 2Q14 / 6m14 The capital markets 6m14 revenue for the Top 13 investment banks totalled $101bn, 3% below the prior year period. FICC weakened 9% during this period to $46bn, and equities revenue declined slightly too; but this was partially offset by strong issuance and advisory fees, and a modest advance […]
Theme: Capital Markets revenues and banks’ valuations
Capital markets revenues and banks’ valuations The variance of capital markets earnings is often said to (1) heighten the volatility of the share price and/or (2) depress the market valuation. For the banks included in this note, we find no evidence that the first assumption holds true … … but we do identify a strong correlation between […]
Theme: A perfect storm
A Perfect Storm Commentators cite a decline in volumes and lack of volatility as being the key reasons for a drop in rates trading revenues. Our analysis shows that the situation is more complex. Several regulatory, market and risk management factors have combined to create a ‘perfect storm’ in rates markets. We expect that some […]
Theme: Revenue and (lack of) volatility
Revenue and (lack of) volatility The current lack of volatility is not exceptional; in equities, FX, and rates it has merely returned to pre-‘Crunch’ levels. The link between banks’ revenue and volatility has been overstated. Equally important factors – to name a few – are banks’ risk management, regulatory initiatives, and investors’ inertia. We reiterate […]
Sector: Capital Markets: Results Review 1Q14
Capital Markets: Results Review 1Q14 The top 13 investment banks recorded $54bn revenue in 1Q14: only 6% below 1Q13, and better than expected by most observers. FICC declined by 16% during this period – largely due to persistent weakness in Rates and FX – but this was offset by strong primary issuance and equities revenue. […]