The real top performers in FICC and equities trading

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When reporting quarterly earnings, banks will break down how each business line performed year-over-year and sequentially. Those percentage increases and decreases are often the headline – leveraged as the key data point when comparing the performance of one bank to another. The flaw of course is that one bank can be coming off a lousy quarter while another just set a company best. At the end of the day, the true measure of success is market share.

So, who are the top dogs in trading? Using data compiled by analysts from Keefe, Bruyette & Woods, we broke down the banks with the greatest market share in fixed income and equities trading across the previous four quarters. Some interesting trends emerge.

One of the big stories in FICC during the latest reporting period was the return to greatness of Goldman Sachs, whose revenues rose 45% year-on-year in Q2. But as you can see below, Goldman didn’t actually increase its market share by much – just 0.3% on a trailing 12-month basis, according to the analysis. The bank’s FICC recovery was more of a reversion to the norm. You can also see how dominant and consistent J.P. Morgan has been, despite Goldman Sachs and Morgan Stanley receiving more accolades for their second quarter performance. JPM may not move the needle much, but it doesn’t have to.

It’s also interesting to see the diverging trends with Citi as it wrestles market share back and forth with Goldman Sachs and Morgan Stanley each quarter over the last four. Expect the sharp drop of FICC trading revenue to continue at Deutsche Bank with its job cuts, although one star DB bond trader is doing his best to lift up the whole unit himself.

Within equities trading, the top three of Morgan Stanley, J.P. Morgan and Goldman Sachs continue to dominate, though market share slipped -0.7% on a trailing 12-month basis at Goldman. While it may not look like much visually, BNP Paribas is quietly making quite a run in equities. Revenues were up 22% year-over-year in Q2, helping the French bank increase its market share from 4.8% to 6.2% over the last four quarters.

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