How Much In Total Trading Revenues Did The 5 Largest U.S. Investment Banks Make In Q3?
Total trading revenues for the 5 largest U.S investment banks crossed $20.7 billion in Q3 2016 – a strong 26% higher than the figure a year ago and also slightly ahead of the elevated figure for the previous quarter. Trading revenues in Q3 were primarily driven by a sharp increase in interest rates trading as well as forex trading activity in the wake of the Brexit vote. This helped boost FICC trading revenues, which was mitigated to an extent by weaker equity trading revenues.
The chart below captures changes in total trading revenues for each of the five largest U.S. investment banks. The red-to-green shading across a particular row should help visualize how these revenues have changed from one quarter to another for individual banks.
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. Notably, excluding the first quarter of each year (when the seasonal trading industry witnesses elevated activity, and hence revenue) Q3 2016 was the best quarter for these banks in terms of total trading revenues.
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 over the last five quarters.
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 on equity 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 Citigroup’s FICC trading yield impacts our price estimate for the bank by modifying the chart below.
See the links below for more information and analysis about the 5 largest U.S. investment banks:
- How Much Did The 5 Largest U.S. Investment Banks Make Through FICC Trading In Q3 2016?
- How Much Did The 5 Largest U.S. Investment Banks Make Through Equity Trading In Q3 2016?
- How Much In M&A Advisory Fees Did The 5 Largest U.S. Investment Banks Generate In Q3 2016?
- How Much In Debt Origination Fees Did The 5 Largest U.S. Investment Banks Generate In Q3 2016?
- How Much In Equity Underwriting Fees Did The 5 Largest U.S. Investment Banks Generate In Q3 2016?
- How Have M&A Advisory Fees For The 5 Largest U.S. Investment Banks Changed Since 2010?
- How Have Equity Underwriting Fees For The 5 Largest U.S. Investment Banks Changed Since 2010?
- How Have Debt Origination Fees For The 5 Largest U.S. Investment Banks Changed Since 2010?
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