Trading income at some of the world’s biggest banks dropped substantially in 2011. In last year’s Top 1000, 11 banks made trading income of more than $7bn. This time, the figure is just five.
Morgan Stanley and JPMorgan were two of the few banks to buck the trend. The former saw its trading income rise 28% to $13.3bn, making it the world’s most profitable bank by that measure. JPMorgan made trading income of $10.9bn, up 16% from the year before.
But Goldman Sachs, whose trading income in 2010 was $17bn, saw it fall 43% to $9.8bn last year, doubtless partly a consequence of its decision to scale back prop trading amid pressure from US politicians. Likewise, Bank of America’s trading income slumped to $6.7bn in 2011, down 33%.
It was not just US banks that were hit, however. Trading income at Credit Suisse, UBS, Deutsche Bank, Société Générale, Nomura and Royal Bank of Scotland fell sharply, too. However, the UK’s Barclays, keen to boost its market share in the US, managed to make trading income of $11.8bn in 2011, down just 6% from a year earlier and more than any bank in the world bar Morgan Stanley.
Fee and commission income also fell, which was unsurprising given the lacklustre global mergers and acquisitions market, and bond issuance being fairly subdued. Bank of America, which again topped the fee and commission ranking, saw its income fall 11% to $36bn. JPMorgan’s dropped 15% to $23bn.
Most banks saw little change in the proportion of their total income made up by fees, commissions and trading. Unsurprisingly, broker-dealers Morgan Stanley (98%) and Goldman Sachs (75%) were the banks with the highest percentage of their income coming from these sources. They were followed by Swiss banks UBS (70%) and Credit Suisse (66%).
