BANKS RISE IN REVENUE FROM CAPITAL MARKET
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Ten years after the failure of Lehman Brothers, trading risks at the large global banks remain – but not close to what they were before the crisis.
Revenues from capital markets activity have increased in 2018, albeit modestly.
According to Coalition data, capital markets revenue for the industry was up 6 per cent in the first half of 2018.
This compares with a decline in capital markets revenue of 4 per cent in 2017. Company statements about this revenue source for the third quarter were mixed, and results for the third quarter will likely vary from firm to firm.
S&P Global Ratings now projects that capital-markets revenues for the industry will be up 3 per cent to 5 per cent year over year, versus their previous forecast of flat revenue.
Despite this pickup, S&P does not see banks taking on undue trading risk and do not anticipate changing ratings due to higher trading risk appetites.
