Sector: Capital Markets: Results Review 3Q15 / 9m15

In 3Q15, capital market revenue for 13 banks in this report reached $37bn, 12% below 3Q14; equity revenues grew slightly y/y, but issuance and advisory and particularly FICC dropped. The 9m15 revenue totalled $139bn, 4% below 9m14.

Banks maintained tight cost controls, especially in comp & benefits, but – partly due to ongoing litigation charges – were unable to fully offset a decline in revenue. The 9m15 pre-tax profit declined by 6% overall. Primary activities suffered the most, followed by FICC; equities, by contrast, grew their pre-tax profit considerably.

European banks were in focus in 3Q15. Deutsche Bank is embarking on ‘Strategy 2020’, Barclays on ‘Strategy Refresh’, Credit Suisse is ‘right-sizing’ and BNP Paribas will filter clients via ‘big data’; details are in the Company section. In the UK, the regulators seem determined to ringfence ‘risky’ and ‘traditional’ banking (for Barclays, the cost may total £1bn+ in 2016-2018); in contrast, the EU recently ruled out mandatory separation in favour of more capital. Prop trading will likely be banned throughout EU.

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