Capital Markets: Results Review 3Q13 / 9m13
The Top 13 investment banks’ 3Q13 revenue declined 13% versus 3Q12, erasing gains made in 1H13. A sharp decline in 3Q13/3Q12 FICC rates, credit and FX revenue was only partially offset by strong equity derivatives, cash (especially low-touch) and steady prime services.
Headcount reductions continued in 3Q13, but at a slower pace than in 1H13; the focus seems to be shifting to restructuring of underperforming units, rather than incremental cuts. Primary activities and Equities productivity advanced strongly versus 9m12, but FICC dropped sharply.
Among major banks, J.P.Morgan and Citi made greatest gains in share of the peer group revenue; J.P.Morgan advanced across all major areas, while Citi’s gains were largely down to the resilience of its FICC revenues. GS continues to lose ground – the bank acknowledged to having had a tough 3Q13, but suggested that’s all it was; we are not so sure. The UBS’ decline was largely due to its pullout from FICC; the bank’s decline in the share of revenue pool in equities was modest, and the bank gained ground in primary activities.