Fixed income drives trading revenues at HSBC

HSBC’s global markets business reported equities revenues fell in 2016, but sales across fixed income products soared.

HSBC’s global markets business saw revenues increase by $353 million in 2016 to almost $15 billion, driven by a surge in fixed income trading.

Adjusted revenues for credit products grew 27% in 2016 compared to the year prior, as rates product revenues surged 54% to $2.1 billion.

In contrast, equities trading revenues in 2016 fell 28% to $1 billion compared to 2015 due to lower trading volumes across Europe and Asia.

Group chief executive Stuart Gulliver explained the global markets business recovered from a sector-wide slow start to the year, but fixed income drove growth across the business.

“Our markets businesses performed well in challenging conditions, particularly in fixed income products… We made market share gains in fixed income in

Europe, and achieved our best ever league table rankings in global debt capital markets,” he said.

HSBC is investing $2.1 billion in ‘digital transformation’ of several of its businesses, including global markets, between 2015 and 2020.

As part of this, Gulliver explained the bank already helped develop a blockchain prototype for a letter of credit that confirms the possibility of sharing information between parties on a private distributed ledger.

“In early 2017, we signed a memorandum of understanding with six other banks to make domestic and cross-border commerce easier for European SMEs using blockchain technology,” he said.