Report
Michael Driscoll ...
  • Michael McTamney

U.S. Capital Markets 1Q23 Results: Tumultuous Markets Boost Trading, Dampen Investment Banking; Trends Likely to Continue

This commentary reviews the 1Q23 results for U.S. capital markets banks

Key highlights include:
•Capital markets net revenues remained outsized in 1Q23 driven by another robust trading performance, particularly in Fixed Income, which mitigated continued weakness in Investment Banking.
•Total net revenues were still more than 30% above the pre-pandemic run rate and down only 13% compared to an exceptional 1Q22.
•We expect volatility in financial markets to continue, which would likely keep client activity elevated, and in turn, bolster trading results.

“Looking forward, strategic dialogues have picked up in recent weeks and pipelines were reported to be healthy. Whether this converts to revenue will likely require a clearer economic outlook and improving CEO confidence in our view. Our expectation is for activity levels to pick up at some point in the second half of the year, but probably more so in 2024.” said Michael McTamney, CFA, Senior Vice President - Global FIG
Underlyings
BANK OF AMERICA CORP

Bank of America is a bank and a financial holding company. Through its subsidiaries, the company provides a range of banking, investing, asset management and other financial and risk management products and services. The company's segments include: Consumer Banking, which provides credit, banking and investment products and services; Global Wealth & Investment Management, which provides investment management, brokerage, banking and retirement products; Global Banking, which provides lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services; and Global Markets, which provides sales and trading services and research services.

BANK OF AMERICA CORP GDR

Bank of America Corp. Dep. Pfd. (Rep. 1/1000th Interest in a share of 6.204% Non-Cum Pfd Series D)

Bank of America Corp. Dep. Shs (Rep. 1/1200th interest of a share of Fltg Rate Non-Cum Pfd Series 4)

Bank of America Corp. Dep. Shs (Rep. 1/1200th interest of a share of Non-Cum Pfd Series 5)

Bank of America Dep. Shs (Rep. 1/1000th Interest in a share of Non-Cum Pfd Series E)

Citigroup Inc

Citigroup Inc

CITIGROUP INC Pfd.

Citigroup Inc.

Citigroup is a financial services holding company whose businesses provide consumers, corporations, governments and institutions with a range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, trade and securities services and wealth management. The company operates via two primary business segments: Global Consumer Banking, which provides banking services to retail customers through retail banking, Citi-branded cards and Citi retail services; and Institutional Clients Group, which includes banking and markets and securities services.

GOLDMAN SACHS GROUP

Goldman Sachs Group Inc

Goldman Sachs Group, Inc., The

JPMorgan Chase & Co.

JPMorgan Chase is a financial holding company. Through its subsidiaries, the company's segments include: Consumer and Community Banking, which provides services through bank branches, ATMs, digital (including mobile and online) and telephone banking; Corporate and Investment Bank, which consists of Banking and Markets and Securities Services, provides a suite of investment banking, market-making, prime brokerage, and treasury and securities products and services; Commercial Banking, which provides financial solutions, including lending, treasury services, investment banking and asset management products; and Asset and Wealth Management, which is engaged in investment and wealth management.

Morgan Stanley

Morgan Stanley

MORGAN STANLEY

Morgan Stanley

Provider
DBRS Morningstar
DBRS Morningstar

DBRS Morningstar is a global credit ratings business with 700 employees in eight offices globally. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry.

Together, we are the world’s fourth largest credit ratings agency and a market leader in Canada, the U.S. and Europe in multiple asset classes. We rate more than 2,600 issuers and 54,000 securities worldwide and are driven to bring more clarity, diversity and responsiveness to the ratings process. Our approach and size provide the agility to respond to customers’ needs, while being large enough to provide the necessary expertise and resources. For more details visit us at dbrs.com.

Analysts
Michael Driscoll

Michael McTamney

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