With the five largest Wall Street banks reported this week, we've gotten an update on how their institutional businesses covering sales & trading as well as investment banking are doing. Industry-wide revenues (using these five large names as a proxy) dropped 15%, or $9.1bn, though they were still up over 15% YoY. Below we show revenue by line of business aggregated across the five bulge bracket firms as well as revenue by firm.
Secondary market revenues (sales & trading) are by far the largest source of revenues at almost 80% of the total. That revenue is split almost equally between equities and fixed income, currencies, and commodities. Investment banking activities include advisory (like mergers & acquisitions) and debt issuance, each about 8% of revenue, with equity a bit more than half their size. JPM and GS are the biggest of the bulge brackets. In terms of growth, equities were by far and away the leaders this quarter, up 43% YoY with Goldman Sachs (GS).by far the fastest grower up 33% YoY. Bank of America (BAC) was the laggard down 7% YoY while FICC trading for the Street saw revenues -3% YoY.
Looking at the largest businesses by firm, JP Morgan (JPM) FICC trading was the dominant desk on the street until the last few quarters. But GS equity trading is gaining ground fast and is likely to pass JPM FICC on a trailing 12m basis next quarter. Morgan Stanley (MS) is also growing fast while Citi (C) FICC trading is also trailing off.
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