July 23, 2010
FX news: Q2 US bank FX revenues compared
Trevor Carr
All the major US banks have now released second-quarter revenue figures. As usual, pure FX income is mostly subsumed within FICC revenue, but here and there something can be seen.
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Goldman Sachs
Citi
JPMorgan
Morgan Stanley
Bank of America Merrill Lynch
State Street
Bank of New York/Mellon
UBS
Deutsche
HSBC
BNP Paribas
Barclays Capital
Standard Chartered
RBS
Lloyd's
Despite a decline in FICC revenue of 35% over Q2 ’09, Goldman Sachs is still top of the trading profit tree: FICC made $4.4 billion in Q2 ’10, compared with $7.4 billion in Q1 ’10 and $6.8 billion in Q2 ’09.
Citi and JPMorgan also saw large declines. Both banks classify FX within fixed income markets. Citi posted FI profit of $3.7 billion in Q2 ’10, compared with $5.4 billion for the same quarter in 2009. However, it appears that the decline was nothing to do with FX: “Relative strength in FX was offset by lower results in rates trading,” the bank says. JPMorgan FI results also slipped but by a smaller amount, to $3.6 billion in Q2 ’10 from $4.9 billion in Q2 ’09.
Morgan Stanley’s investment in technology looks like it is paying off. Compared to the competition, Q2 ’09 FICC revenue was poor at $900 million, but the $2.3 billion reported for Q2 ’10 bears comparison with the other US banks in Euromoney’s top dozen banks by share of the FX market. In fact Bank of America Merrill Lynch also reported $2.2 billion for Q2 ’10, but this was lower than the $2.7 billion in FICC revenue reported for Q2 ’09.
Outside the top-12 global FX banks, State Street and Bank of New York/Mellon revenues were stable. Both report numbers for FX alone, rather than with FICC, so comparisons with the figures above are not very accurate.
State Street reported FX revenue of $273 million, up from $265 million in Q2 ’09, while BNY/Mellon reported $244 million against $240 million.
The most impressive result gleaned from the figures is revenue in excess of $2 billion against absolutely nothing the previous year: that’s the impact of Her Majesty’s Government’s bonus tax. Goldman contributed $600 million to UK coffers, JPMorgan $550 million, Citi $400 million and Morgan Stanley $361 million. BAML and BNY/M didn’t explicitly say what was dipped from their pockets, though State Street admitted to stumping up $21 million.
With the exception of Credit Suisse, the European banks are slower at adding up the numbers than the Americans. Credit Suisse reported revenue explicitly from FX products during Q2 ’10 of CHF1.088 billion ($1 billion), although the breakdown for last year is not clear. There are notable interim results still to come from: UBS and Deutsche on July 27, HSBC and BNP Paribas on August 2, Barclays on August 5 and RBS on August 6. |