Investment Banks’ Fixed-Income Revenue Drops 16%, Coalition Says

May 18, 2014 10:44 pm ET

May 19 (Bloomberg) -- The 10 largest investment banks including Barclays Plc, Goldman Sachs Group Inc. and Deutsche Bank AG saw a 16 percent fall in fixed-income, currencies and commodities revenue in the first quarter, according to analytics firm Coalition.

FICC revenue declined to $22 billion in the quarter from a year earlier, London-based Coalition said in a statement today. Equities revenue sank 3 percent to $11.2 billion, while investment banking, including advisory, rose 4 percent to $9.7 billion.

“Tougher regulatory capital requirements and subdued client activity were the driving factors for weakness in FICC,” Coalition said in the statement. “This more than offset modest improvements in investment-banking divisions and resulted in an overall decline of revenue.”

Barclays, U.K.’s second-largest bank, said this month that income from FICC, traditionally the largest source of revenue for its investment bank, fell 41 percent to 1.2 billion pounds ($2 billion) in the first quarter. Clients of securities firms are trading less as the U.S. Federal Reserve slows its monthly asset purchases and leaves bond investors preparing for rising interest rates.

The Coalition Index tracks the performance of the 10 largest investment banks globally, including Goldman Sachs, JPMorgan Chase & Co., Barclays, Morgan Stanley, Citigroup Inc. and UBS AG.