Weak equities performance drives top investment banking revenues down

Investment banking revenue in 2016 expected to decline for fourth year in a row.

Investment banking performance year-to-date has declined once again, driven by underperformance in equities businesses, according to Coalition’s third quarter index.

Coalition’s data on the 12 largest global investment banks revealed full-year revenues have declined 10% so far this year compared to last year, with sales totalling $36.5 billion.

The index said it expects full-year 2016 investment banking revenues to show another decrease for the fourth year in a row.

Equities underperformed in half-year revenues, with weakness in derivatives and cash as client risk appetite reduced and trading volumes remained subdued.

Full-year revenues in equities businesses so far this year have decreased 15% from $49.8 billion to $42.3 billion.

The index also revealed an improved performance in fixed income, currency and commodities (FICC) businesses, despite a challenging start to the year.

Full-year revenues in FICC are already up 5% compared to 2015, with sales totalling $73.4 billion.

Coalition’s index also revealed headcount across banks continued to decline in front office function, although the pace slowed in the second and third quarter this year.