Jan 22, 2021 - Economy

Big bank bond trading soared in 2020

Data: Analysis of company filings; Chart: Axios Visuals

The pandemic helped to pull big banks’ bond trading revenue out of a multi-year slump.

Why it matters: Revenue within the so-called fixed income, currency and commodity (FICC) divisions has been slowing for years.

By the numbers: Revenues across bond trading desks at Goldman Sachs, Citi, Morgan Stanley, JPMorgan and Bank of America collectively rose to roughly $68 billion in 2020 — the highest level in at least 10 years, according to an Axios analysis of company filings.

  • Goldman Sachs said FICC revenues rose 57% compared to 2019, helped by a record level of financing revenues.
  • Morgan Stanley said its desk posted the highest revenues in over a decade.

What happened: Trading volume surged after investors rushed into safe-haven assets as the coronavirus hit financial markets. The Fed’s intervention in credit markets also boosted investment banks.

Yes, but: Bond trading activity slowed for some players like Bank of America in the last quarter of the year, as Bloomberg notes.

  • What they’re saying: Strong credit trading "was more than offset by declines across most macro products and mortgage trading," Paul Donofrio, BofA's bank's chief financial officer, told analysts this week.

Other banks missed analysts' high expectations: Morgan Stanley and JPMorgan were the only big banks to top Wall Street’s FICC forecasts.

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