Strong trading drives 5% rise in global CIB revenues in Q2 – Coalition Greenwich

Strong trading revenues should be the main driver for major global banks' corporate and investment banking (CIB) revenues in the second quarter of 2025.

Revenue from equities, fixed-income, currencies and commodities (FICC) trading at the world's leading sector players should grow between 10% and 15% in the quarter, according to preliminary estimates of research firm Coalition Greenwich, part of S&P Global. Advisory and underwriting and transaction banking revenues are likely to be flat year over year, the firm said in a July 2 flash report.

Tariff impact on i-banking

Equity trading should see the strongest growth due to the tariff-driven volatility in April, which resulted in "outsized gains" in derivatives trading, Coalition Greenwich said. Heightened volatility in macro products trading in FICC, coupled with increased institutional client activity, drove revenue, especially in currencies, the firm said.

Banks' relative FICC performance in the quarter will depend on business and client mix. Banks focused on spread products, such as corporate bonds, will likely fare worse as spread product revenues are set to fall due to declines in flow credit and municipal bond trading, Coalition Greenwich's analysis shows.

While positive for trading, the tariff-induced market turmoil slowed equity capital market (ECM) underwriting business, such as initial public offerings (IPOs) and follow-on equity raises. Weaker ECM revenues will lead to flat revenue growth in banks' overall advisory and underwriting operations, with slight upticks expected in M&A advisory and debt capital market (DCM) fees, Coalition Greenwich said.

For its investment banking index, Coalition Greenwich monitors revenue at Bank of America Corp., Barclays PLC, BNP Paribas SA, Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings PLC, JPMorgan Chase & Co., Morgan Stanley, Société Générale SA, UBS Group AG and Wells Fargo & Co.

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Transaction banking slows, securities services grow

In transaction banking, the tariff-led volatility should boost trade activity, yet revenue growth will stay under pressure due to margin compression despite higher demand for financing, Coalition Greenwich said. The firm expects overall transaction banking revenue in the second quarter to remain largely unchanged from a year ago, as lower net interest income (NII) will offset growth in fee income and trade volumes.

"Banks with stronger payments franchises are expected to outperform, as cash management revenue remains flat amidst declining NII," Coalition Greenwich said.

For its transaction banking index, the firm tracks revenue at BofA, BNP Paribas, Citigroup, Deutsche Bank, HSBC, JP Morgan, Société Générale, Standard Chartered PLC and Wells Fargo. According to the latest index, sector revenue edged by 1% in 2024 after jumping 25% in 2023, driven by the turning interest rate cycle.

Second-quarter revenue from lending and securities services will increase by 1% to 5% on the year. Big securities services providers are expected to book higher fee revenues thanks to the market rebound experienced in May, with "robust valuations and higher transaction volumes" that underpinned the growth, Coalition Greenwich said.

The firm's securities services index tracks revenue at Brown Brothers Harriman & Co., BNP Paribas, Bank of New York Mellon Corp., CACEIS Bank SA, Citigroup, Deutsche Bank, HSBC, JP Morgan, Northern Trust Corp., Royal Bank of Canada, Société Générale and State Street Corp. Combined revenues at the banks increased by 5% year over year to $43.9 billion in 2024, reaching their highest level since 2013, Coalition Greenwich's latest index shows.

The second-quarter earnings season kicks off in mid-July with JP Morgan, Citigroup and Wells Fargo scheduled to report first on July 15.