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Trading revenue from the world's biggest banks
showed signs of recovery in the first quarter as market
volatility boosted dealing room profits after years of
attrition.
However, after a normal April, May is proving to be relatively
weak for revenue from fixed income, currencies and commodities (FICC)
that could continue into June and see revenues in that division
slump 25 percent, JPMorgan analysts predict.
"We are witnessing a slowdown in investment banking revenues in
the second quarter 2015, potentially more than normal
seasonality, driven by weakness in rates following a strong
first quarter performance" the analysts wrote in a note to
clients.
The first quarter is typically the strongest period of the year
for investment bank income. In the second quarter, equities
divisions, though are outperforming normal seasonal trends and
are expected to show only an 8 percent decline
quarter-on-quarter, similar to advisory and underwriting
divisions.
UBS is JPMorgan's top pick followed by Deutsche Bank.
(Reporting by Anjuli Davies, editing by Louise Heavens)
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