If you want to work for a market leading bank in fixed income or equities trading, the lesson of the past two years is this: don't count on the leader today being the leader tomorrow. There are a few consistencies in both markets - Morgan Stanley is almost always top in equities, and Citi and JPMorgan are always at the top in fixed income, but there are big variations too. Today's winner is tomorrow's loser and yesterday's loser might make a comeback.
The charts below show the latest percentage market shares, based on US$ revenues, for leading banks in both asset classes between 2017 and the second quarter of 2019. If you want to work for a top-tier bank, you might want to study them carefully. There are some distinct trends over time.
Deutsche Bank's lost market share in equities trading is, for example, laid bare. But then so too are HSBC and Citi's in the most recent quarter. Barclays is holding its own in the equities market; Goldman Sachs just had the best quarter in equities trading for over two years.
In fixed income currencies and commodities, JPMorgan, Barclays and Credit Suisse have been gathering steam this year. Deutsche Bank's demise in FICC is less pronounced than in equities, but there's been a slow bleed nonetheless since 2018. HSBC is floundering in FICC too, at least compared to its performance last year.
If KBW's figures suggest anything, though, it's that things can change and this year isn't over yet. In the third quarter, KBW's analysts are predicting that FICC revenues at Citi, BNP Paribas and HSBC will decline by 8%, 18% and 16% respectively year-on-year, while Credit Suisse's are expected to rise 14%. In equities, Credit Suisse is also expected to excel in the third quarter, with a 6.5% rise, while UBS's equities revenues are expected to fall by 4%.
In constant currency terms, European banks' equities businesses are the places to work in the third quarter. - KBW's banking analysts expect equities revenues to increase +2.5% for the average U.S. bank and +4.3% for the average European. In FICC, the opposite is the case: U.S. banks' revenues are expected to increase by +0.2%, while Europeans' decline -2.7%. Good luck.
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