Commodities Drive FICC Revenue Growth: Coalition
Posted by Colin Lambert. Last updated: May 28, 2021
The latest investment banking report from Coalition says investment banking revenues hit a new six year high in the first quarter of 2021 and that in FICC markets, they grew by 15%, driven by commodities and spread products. The sizeable gains in these products, however, was partially offset by lower G10 Rates and FX revenues, which “normalised” the firm says.
Coalition says that lower client activity combined with reduced risk appetite and significantly lower volatility compared to Q1 2020 led to a decline in revenues for G10 FX. Revenues decreased across regions with spreads continuing to tighten, however, it says there was a modest improvement in activity from March.
The revenue decline in EM macro products was was predominantly driven by lower financial institutions’ activity and directional trading, the firm adds, noting in EM FX, revenues dropped across regions while CEEMEA saw a marginal outperformance on due to movements in select EM currencies.
FICC revenues across the 12 firms tracked hit $28 billion according to the firm, up from $24.4 billion in the same quarter in 2020, which coincided with the onset of the global pandemic.
FICC products saw a small decline in headcount, the report says macro products saw a decline in headcount whereas spread products witnessed a surge in hiring activity.