Dream deferred

18 October 2018 By Christopher Thompson Follow @CGAThompson

On average, U.S. investment banks reported a 7 percent jump in equities revenue in the third quarter, while fixed income trading declined. If results from European peers follow the same trend, top-line growth will be minimal. That leaves more cost cutting to boost dreary returns.

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Wall Street’s top investment banks reported better-than-expected earnings for the third quarter of 2018, helped by strength in stock trading and equity underwriting.

Strength at equity trading desks of both Goldman Sachs and Morgan Stanley helped offset weakness in bond trading in the third quarter, in line with a broader trend across the industry. JPMorgan, the biggest U.S. investment bank by assets, reported a 17 percent year-on-year increase in equity trading revenue while fixed income revenue fell by a tenth.

European investment banks including Deutsche Bank, Barclays and UBS are due to begin reporting third-quarter results in the week of Oct. 20.

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