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Fitch: Low Volatility Impacts 3Q Results for Big US Banks.

New York: Third-quarter 2017 results remained challenging for all five U.S. global trading and universal banks (GTUBs) as strong investment banking results were offset by lower trading results, according to Fitch Ratings in its latest U.S. Capital Markets Quarterly.

Strength in advisory and debt underwriting were big reasons for the strong investment banking results in the third quarter. On the other hand, overall trading net revenue declined 15% year-over-year driven by continued declines in fixed income, currencies, and commodities (FICC) net revenue, while equity markets were flat year-over-year.

Historically low volatility as measured by the VIX Index is still weighing on overall fixed income, currency and commodities results because clients have not needed to re-hedge their positions. Elsewhere, equity markets revenue was flat year-over-year. Strong equity markets drove some client activity, particularly in cash equities, while derivatives activity levels declined year-over-year.

JPMorgan retained the top spot in market share last quarter with Goldman Sachs not far behind. Citigroup, Bank of America and Morgan Stanley rounded out the rankings.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Jan 29, 2018
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