How Much Did Equity Trading Contribute To The Top Line Of The 5 Largest U.S. Investment Banks In 2016?

by Trefis Team
+3.18%
Upside
42.65
Market
44.00
Trefis
MS
Morgan Stanley
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Morgan Stanley’s focus on the equity trading business since 2012 has made it the largest player in the industry over recent years, and has helped the bank’s equity trading desk contribute more than 23% of its total revenues for 2016. These operations are also an equally important part of Goldman Sachs’ business model. In comparison, the more diversified business models and smaller equity trading desks of JPMorgan, Bank of America and Citigroup resulted in these operations only contributing between 4-6% of their top lines.

IB_QA_US_RevEquityShare_FY16

Despite strong equity trading volumes over the second half of 2016, major investment banks reported a decline in total equity trading revenues for the year compared to 2015 due to the weak first half performance. Notably, the seasonal securities trading business sees the most activity in the first quarter of the year, and a weak Q1 2016 weighed on the total figure. This, in turn, led to a reduction in the share of equity trading revenues for each of these banks compared to 2015. But equity trading revenues are expected to increase sharply in 2017, and this should help increase their share in the top line of all banks this year.

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

Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment / ask questions on the comment section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to the full Trefis analysis for Goldman SachsJPMorganMorgan StanleyBank of America | Citigroup

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