LONDON (Reuters) – Revenues at the world’s largest investment banks slumped to their lowest level for eight years in the second half of 2018, spoiling an otherwise improved year after a tough decade since the financial crisis.
A particularly poor fourth quarter pulled revenues for the top 12 banks down 5 percent over the latter six month period to $64.9 billion, down from $68.4 billion the previous year.
Over 2018 as a whole investment banking revenues inched up marginally to $151.4 billion, up from $150.9 billion the prior year, with a return to market volatility at the start of 2018 helping lift trading units.
An exceptionally weak December led to trading in fixed income, currencies and commodities (FICC) ending the year at its lowest level since the financial crisis, with revenues down 5 percent to $64.2 billion.
Equities enjoyed a better year, particularly in the Americas, with overall revenues up 10 percent to $45.9 billion, while investment bank advisory was flat at $41.2 billion.
Operating margins across investment banks also declined, falling to 33 percent, down from 35 percent.
Poor returns at investment banking units have come into sharper focus in recent weeks, with a bad final quarter dragging full-year numbers down at a number of banks, including HSBC.
Coalition tracks Bank of America Merrill Lynch, Barclays, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, Societe Generale and UBS.
Reporting by Iain Withers; Editing by Angus MacSwan