Q2 Equity Trading Revenues For Largest U.S. Banks Highest Since Early 2015

by Trefis Team
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Morgan Stanley
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The 5 largest U.S investment banks reported more than $7.4 billion in total equity trading revenues for Q2 2017 – marginally higher than what they made a year ago, and also 4% better than the figure for the previous quarter. It should be noted that the equity trading revenues are seasonally highest in the first quarter of the period, but the figure for Q1 2017 was slightly depressed.

Global equity markets remained upbeat over the first half of 2017, with the U.S. stock market scaling record highs over the period. The resulting flurry of equity trading activity, coupled with mark-to-market gains, helped boost revenues for the five largest U.S. investment banks. Notably, the relative standings of these five banks have remained unchanged since Q2 2015 – the quarter when Morgan Stanley cemented its position at the top of the list by pushing Goldman to the second spot. Incidentally, the $7.4 billion in total equity trading revenues for the quarter was also the highest since the figure of $7.6 billion in Q2 2015.

Morgan Stanley dominates the equity trading business, with the investment banking giant holding the top rank globally in 13 of the last 16 quarters (Goldman topped the list on the other three occasions). Unlike its other U.S.-based peers, Morgan Stanley implemented sweeping changes to its business model over 2011-2012 to shift the focus of its business model away from fixed income trading and towards equity trading. And the bank has has done well to report average equity trading figures of $2 billion over the last five quarter – higher than any other investment bank globally. In fact, second-ranked Goldman Sachs reported an average figure of $1.75 billion over the same period.

You can see how changes to Morgan Stanley’s equity 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:

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

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