Fixed income trading remains a two-tiered race in European banking, with Q2 seeing BNP Paribas and Barclays continue their see-saw journey and Societe Generale overtake UBS as the Swiss bank’s revenues dropped off.
Across the board, banks were keen to blame an unfavourable environment for their sliding revenues – and noted that equities were performing far stronger.
Barclays retained its top spot this quarter in spite of a 13% quarter-on-quarter (QoQ) decline, closing June with €1.7 billion. Revenues rose just 2% year-on-year (YoY).
“This is the house that fixed income built, but it’s increasingly a house on which we lean on equities,” noted CEO C.S. Venkatakrishnan.
Falling in tandem, BNP Paribas’ fixed income trading revenues were down a marginally sharper 13.7% QoQ and down 0.3% YoY to €1.4 billion.
Chief financial officer Lars Machenil noted, “FICC was stable compared to a high base last year. There was a lot of volatility a year ago in April.”
At the other end of the spectrum, Societe Generale managed to keep its revenues on an almost even keel between Q1 and Q2, down just 4.6% to €545 million. On a yearly basis, revenues fell 11%.
This was the result of an unfavourable environment for the business mix, the firm stated, with high exposure to Europe and rates.
UBS fared less well, with a reported €456 million representing a 42% QoQ drop and a 22% YoY decline.
Also citing external factors for the results, chief financial officer Todd Tuckner commented, “[This reflects] a less favorable environment for our business mix than a year ago, and disciplined resource allocation as we selectively shifted balance sheet capacity to capitalize on stronger client momentum in equities.”
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