UBS reports late, on August 14th. The bank’s 1H24 performance shown here is based on Tricumen’s early estimates.
Capital Markets
Banks’ 1H24 operating revenue totalled $114bn – 8% up y/y – largely thanks to a strong 2Q24. In contrast to 1Q24, EMEA banks outpaced their US peers in Banking and Equities (especially Prime Services and Derivatives); and were only slightly behind in FICC, mostly due to underperformance in FX and Credit. EMEA banks also controlled their costs better, and grew their profits by 20% y/y.
After testing waters in recent years, several US banks are making a concerted push into private credit: per Bloomberg, by mid-June, asset management units of just three banks announced plans to plough more than $50bn – raised from investors and internally – into this market. Direct lenders are still well ahead: in late July, Ares Management closed its latest direct lending fund, focused on mid-sized US corporates, with $34bn of capital.
Commercial Banking & Treasury Services
Strong fee income – especially at banks able to extract collaboration revenue with capital markets – offset a decline in net interest income. The demand for new loans remained soft across corporates, and deposit growth was muted. Several banks reported that the revolver utilisation remains below pre-Covid levels.
Transaction banking revenue rose, driven by higher payments volumes in Europe and, to a lesser degree, APAC. Deposit margins shrank, particularly at US banks. European banks outpaced their US peers in 1H24 revenue and profit growth.