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Strong Growth in Q2 Cap Market Revenues for European Firms, but Credit Provisions Remained High

Q2 was another strong quarter for capital markets revenues at the European Banks with major capital markets activities (European Firms, including Credit Suisse Group, UBS Group, Deutsche Bank and Barclays). In the extremely uncertain and unprecedented Coronavirus pandemic (COVID-19) environment, capital markets results are offsetting the impact of the low rate environment, given these banks diversified business models. These Firms' revenues showed strong growth in Q2, similar to that of Q1. In this quarter, capital markets revenues benefited from very high volumes of corporate equity and debt issuance and sound trading activity. Volatility levels remained high in Q2, although lower than at the peak in March 2020, which drove client activity and resulted in strong sales and trading revenues growth year-on-year (YoY). This commentary focuses on the performance of the capital markets revenues (including Sales & Trading, Underwriting and Advisory) of the major European firms in Q2 2020.