Goldman Sachs bond trading slumps 40% in Q2

Goldman Sachs FICC business has seen the biggest drop of all the Wall Street banks so far in the second quarter.

Goldman Sachs reported a second quarter drop of 40% in fixed income, commodities and currencies (FICC) revenues, the largest so far among Wall Street banks.

It reported revenues of $1.16 billion for the three months ending 30 June for FICC sales and trading, following a similar trend with other banks including JP Morgan, Citi and Bank of America Merrill Lynch (BAML).

Goldman Sachs cited the steep fall in revenues “to significantly lower net revenues in interest rate products, commodities, credit products and currencies.”

Martin Chavez, chief financial officer for Goldman Sachs, admitted on its quarterly earnings call that the bank had suffered its worst quarter ever in commodities trading.

It also stated the FICC business “operated in a challenging environment characterized by low levels of volatility, low client activity and generally difficult market-making conditions.”

However, revenues from equities operations were up 8% in the quarter to $1.89 billion, as it recorded higher revenues from cash products and derivatives.

Goldman Sachs is currently at the bottom of the list for FICC revenues in the quarter, with JP Morgan and Citi both reporting revenues of $3.2 billion in the business and BAML with $2.3 billion. However those banks also witnessed a decline in revenues, though smaller than that seen at Goldmans.

Morgan Stanley is the last of the big five Wall Street banks to report its second quarter earnings.

Goldman Sachs was ranked by Greenwich Associates as joint second alongside JP Morgan in global fixed income market share for 2016, and joint top with Citi in global rates trading.