LONDON (Reuters) - Revenue at the world’s 12 largest investment banks rose in the first six months of 2017 thanks to a stronger performance in the underwriting of debt and equity issues compared with a year ago, a survey showed on Thursday.
Overall revenues were up 4 percent at $82 billion in the first half of 2017 but were still almost 13 percent down from the same period five years ago, according to data from industry analytics firm Coalition.
An improving global economy, robust corporate profitability, an ample supply of money by central banks, even as U.S. interest rates are rising, and some fading political risk from elections have all contributed to pushing market volatility to its lowest level for years across fixed income, currency and commodity markets around the world. This makes it easier to issue equity and debt, but harder to profit off trading.
“A very low level of macro volatility has supported equity issuance but put pressure on certain fixed income products, while record low interest rates have helped drive the debt business,” said George Kuznetsov, Head of Research and Analytics at Coalition.
Trading in fixed income, currencies and commodities (FICC) divisions, the largest share of total revenue, was stable compared with the first half of 2016.
“The expectations earlier in the year of a recovery in FICC have not materialized,” Kuznetsov added.
Meanwhile equities revenue fell 3 percent to $22.6 billion due to tougher competition, the report said.
Coalition tracks Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse , Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Societe Generale and UBS.
Editing by Greg Mahlich