Investment banks’ revenues fall $14bn in H1

Barclays-HSBC-Canary-Wharf-London-700.jpgThe world’s largest investment banks have seen combined revenues fall to their steepest post-financial crisis level sinking 15 per cent in the first half of the year.

Research firm Coalition found the top 12 global banks, including Goldman Sachs, Barclays, Credit Suisse and HSBC, had revenues dropping $14.3bn to $79bn (£59bn) in the first half down from $93.3bn in 2015, the FT reports.

This marked the steepest fall year on year since a drop of 25 per cent between the first halves of 2009 and 2010.

None of the banks analysed by the firm is expected to deliver double digit return on equity by next year, but would only reach 5.4 per cent in 2016 and 6.6 per cent next year.

Coalition head of research and analytics George Kuznetsov says the second half of the year is set to improve for banks despite their revenues to stay within 5 or 6 per cent next year given tougher rules on capital and risk-taking.

Kuznetsov says: “Investment banks are realising there is no top-line relief, capital allocation from [parent companies] probably won’t change much, and regulations won’t change much. So improvement in returns becomes dependent on optimising the cost base or grabbing market share.”