How Much In Total Trading Revenues Did The 5 Largest U.S. Investment Banks Generate In Q2 2016?

+8.83%
Upside
384
Market
418
Trefis
GS: Goldman Sachs logo
GS
Goldman Sachs

Total trading revenues for the 5 largest U.S investment banks crossed $20.5 billion in Q2 2016 – a good 12% higher than the figure a year ago. The gains can be primarily attributed to strong fixed income and currency trading activity over the quarter, which more than made up for mark-to-market losses incurred by the banks’ equity trading desk at the end of the quarter due to the unexpected Brexit vote.

IB_QA_US_TotalTrading_16Q2

These five banks usually account for around 40% of total global securities trading revenues for any given quarter. JPMorgan is the leader in the global trading industry, with the diversified banking group ranking #1 in every single quarter for the last five years, except for Q4 2012 when Goldman Sachs grabbed the top spot thanks to an exceptionally strong equity trading performance that quarter.

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The table below shows the proportion of total trading revenues for each bank that came from the FICC (fixed income, currencies and commodities) and equity trading desks.

IB_QA_US_TotalTradingProp_16Q2

On average, FICC operations contribute roughly two-thirds of the total trading revenues for these banks, with equity trading bringing in the remaining one-third. But there is a lot of variation in this proportion across banks. While Citigroup relies on fixed income trading more heavily than the others (approximately 80:20), Morgan Stanley’s focus is unquestionably on equities trading. Goldman seems to give both its trading desks roughly the same amount of importance, although their respective share of the total trading revenues fluctuates considerably from one quarter to the next based on prevalent market conditions. You can see how changes in Goldman’s FICC trading yield impacts our price estimate for the bank by making changes to the chart below.

See the links below for more information and analysis about the 5 largest U.S. investment banks:

See full Trefis analysis for Goldman SachsJPMorganMorgan StanleyBank of America | Citigroup

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