CIB Review 1Q24

Capital Markets

The aggregated revenue of the banks in this report reached $60bn in 1Q24, 3% ahead of 1Q23. Banking/issuance fees benefitted from excellent market conditions, which drove the growth in revenue and productivity. Several banks noted that significant deal volume was brought forward from later in the year. Equities derivatives made a meaningful contribution, too. However, FICC revenue declined: macro was impacted by low(er) volatility and client activity, and commodities dropped sharply across most banks.

Banks matched costs to revenue, so pre-tax profits grew by 2% y/y, to $24bn, with growth equally distributed, in percentage terms, between North American and European banks.

In the UK, one bank abolished the bonus cap. However, the executive comp is (again) under regulatory scrutiny in the US, from no fewer than six agencies, including FDIC and OCC.

Commercial Banking & Treasury Services

In Commercial Banking, 1Q24 was marked by paydowns as US LMEs shifted their refinancing needs to capital markets. An increase on deposit rates was largely offset by higher fees, however; most banks also benefited from lower hedging costs and wider loan spreads. Despite ongoing investment, the aggregated pre-tax profit grew 10% y/y.

Treasury Services clients moved to higher-yielding alternatives, depressing banks’ margins; but fees rose, especially in cash management.

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