Sector: Capital Markets: Results Review 4Q13 / FY13

Capital Markets: Results Review 4Q13 / FY13

Compared to prior-year periods, the Top 13 banks’ capital markets revenue was flat in 4Q13 and only slightly ahead for the whole of 2013.  FICC proved more resilient that many commentators expected, with cumulative decline being mostly offset by stronger primary, equities, as well as prop and principal investment revenues.

The pace of headcount reductions continued to slow down in 4Q13.  Another wave of cuts seems to be looming in 1H14, with several big banks reviewing the scope and/or the business mix of their FICC divisions, extending well beyond disposals of physical commodities units.

In the meantime, headcount reductions contributed to gains in productivity: in FY13, revenue/FTE grew faster than revenue in primary issuance and advisory businesses and equities; and held up better in FICC.

UBS and Goldman Sachs recorded the greatest gain in the share of peer group revenue.  Both banks reversed declines seen in 9m13; GS advanced in primary activities and FICC, while UBS continues to benefit from its focus on equities.  Deutsche Bank was the key underperformer; it lost a lot of ground in FICC, offsetting a small 4Q13 gain in equities market share.