U.S. Capital Markets 2Q22 Results: Stellar Fixed Income Trading, Weak Underwriting
This commentary reviews the 2Q22 results for U.S. capital markets banks.Key highlights include:
• Despite mixed trends, capital markets net revenues remained outsized in 2Q22 led by another exceptional trading quarter, particularly in Fixed Income.
• Total net revenues were still more than 30% above the pre-pandemic run rate and down only 4% compared to a very strong 2Q21.
• Given the still complicated and uncertain operating environment, we expect continued volatility in the financial markets, keeping client activity elevated.
“The operating environment remains complicated and uncertain, with generationally high inflation, shifting monetary policies, the war in Ukraine and the pandemic, which could result in a broad range of outcomes. As such, we expect continued volatility in the financial markets, keeping client activity elevated. Regardless of what transpires, we see the U.S. peer group as well positioned, given their top-tier market positions globally across businesses.” said Michael McTamney, CFA, Senior Vice President – Global FIG.
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.
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.
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.
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