Sector: Results Review 1Q13

Results Review: 1Q13

Capital markets 1Q13 revenue of top 12 banks totalled $56bn, 6% below 1Q12.  Primary fee activities grew strongly, with the top 3 banks gaining market share in DCM bonds, securitisation, and ECM.  In sales & trading, FICC declined from a very strong 1Q12; and in equities the initial optimism proved unfounded as the overall revenue opportunity declined relative to 1Q12.

As layoffs announced in late 2012 continued into this 1Q13, the overall revenue/front office headcount productivity grew in primary activities and equities.  FICC productivity declined, however: barring an upturn in revenues, we expect ‘our’ banks will trim their staffing levels further.

Citi’s share of the overall revenue grew on comparably strong FICC revenues.  UBS recorded a more modest gain, but the bank’s 1Q13 results were well received, not least due to its strong FICC showing (see our ‘UBS Restructured’ note, 2-May-13).  Morgan Stanley lost more ground, especially in FICC.

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