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Global i-banks' H1 revenues fall to lowest level since 2006

The world's 12 largest investment banks posted combined revenues of $76.8 billion in the six months to June-end, their lowest aggregate first-half results since 2006, according to the latest sector index released by business intelligence firm Coalition.

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Coalition's IB Index tracks European groups Barclays PLC, BNP Paribas SA, Credit Suisse Group AG, Deutsche Bank AG, HSBC Holdings PLC, Société Générale SA and UBS Group AG, and U.S. banks Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Bank of America Merrill Lynch.

The 11% year-over-year decline in revenues comes as first half results from all three divisions decreased over the period. Earnings from fixed income, currencies and commodities trading totaled $35.1 billion in the half, down 9% from a year ago, while equities revenues fell 17% on a yearly basis to $22.1 billion. Revenues at the investment banking division, or IBD, stood at $19.7 billion in the period, down 8% from a year earlier.

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The decrease in FICC revenues was seen across all products, particularly G10 foreign exchange rates and other macro products, Coalition said, adding that the underperformance at the equities division was due to the normalization of trading results from equity derivatives and margin compression in the prime services and cash equities segments. Additionally, poor results in the equity and debt capital markets impacted IBD earnings.

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For the second quarter, the investment banks' revenues totaled $37.7 billion, down 11% year over year. FICC revenues in the quarter came in at $16.2 billion, down 12% on a yearly basis, while equities and IBD earnings declined 12% and 9%, respectively, to $11.2 billion and $10.3 billion over the period.

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The banks also continued to reduce headcounts at their investment arms in the half, with the FICC and equities businesses seeing year-over-year declines of 3% and 5%, respectively. Headcount at the IBD dipped 1% on a yearly basis.

Coalition is owned by CRISIL which, with S&P Global Market Intelligence, is part of S&P Global Inc.