JP Morgan to see further revenues shift to electronic trading

CEO, Daniel Pinto, explained changes in market structure could see $5.5 billion in revenue move to electronic trading.

JP Morgan is expected to see around a quarter of its total markets revenues to shift to electronic execution, according to the head of its investment banking division.

Speaking at the bank’s investor day Daniel Pinto, CEO of JP Morgan’s corporate and investment banking (CIB) division, said that changes in market structure could see a potential $5.5 billion in revenue move to electronic execution.

Pinto also highlighted that revenues from electronic trading made up 12% of the $21 billion in total markets revenue the bank made during 2016.

He stated that 90% of its fixed income execution, in terms of trading tickets, is done electronically, with 11% of fixed income revenues coming from electronic trading.

A recent study revealed the number of investors trading fixed income electronically has continued to grow year-on-year, with 46% now stating they trade at least some of their volume electronically.

In 2011, just 18% of fixed income was traded electronically globally on a volume-weighted basis, but this surged to 37% in 2016.

The potential growth in revenues from the business follows the change in JP Morgan’s strategy to trading, after it named its veteran fixed income trader David Hudson as global head of markets execution last May.

Since his appointment JP Morgan has laid out a new electronic execution team, with a focus on electronic execution for macro products such as fixed income, currencies and derivatives.

It has also brought on a number of senior technology heads from Deutsche Bank to boost the electronic trading team.