Retrenchment views

4 April 2013 By Dominic Elliott

Goldman Sachs’s president sees only two post-crisis winners: his bank and JPMorgan. He exaggerates. Other behemoths will also gain as under-fire firms trim and shrink. But if the first quarter’s depressed trading volumes are a sign, there will be less business to fight over.

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Lower trading volumes in products including interest rate, credit and commodities during the first quarter imply the top 11 investment banks could suffer a combined client revenue drop of up to 43 percent, assuming they have been unable to make additional money through hedging and wider spreads, according to a forecast by consultancy Tricumen.
Global investment banking fees for capital markets and advisory activity rose 6 percent to $19.8 billion in the first quarter of the year against the same period in 2012, according to data from Thomson Reuters published on April 4. Nine of the top 10 banks increased or maintained their market share on the same period a year ago. Credit Suisse was ranked eighth for actual fees paid - four places lower than last year. Its market share slipped 0.8 percentage points.
Goldman Sachs president Gary Cohn told a press briefing in São Paulo, Brazil that other than his bank and JPMorgan, big international banks were taking “substantial steps back from the market”.

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