Banks are placed along

Megan Murphy

The order period for reporting profits now comes with the traditional wave of indignation over the bonuses after institutions like Goldman Sachs, JPMorgan Chase and Credit Suisse revealed a flourishing results. Despite the seasonal slowdown during the summer when the bankers retire in popular resorts such as Hemptans and Sardinia, the leading 13 global investment banks have gained $ 73 billion in net revenue during the third quarter, according to a study of Morgan Stanley.
The amount was only 4% less than that in the second quarter and shows that historically high activity in corporate finance land generously compensated fairly in the market for mergers and acquisitions and modest appetite for syndicated loans.
Bankers have realized how inappropriate it was their swagger with a record performance for the first half, less than a year after a nearly fatal shocks, and now pay more attention to public anger against the charges.
Very few banks publicly objected to the offensive efforts of regulators to reform their systems of payment. Plans are employees receive a larger share of the bonus in the form of shares and to establish a closer relationship between pay and long-term results.
Goldman, the subject of flattering neosobeno series of exhibitions in recent months, is considering a charity donation of $ 1 billion at the end of the year, to allay the anger of the fact that he intends to pay $ 650 per thousand in each of its 30 thousand employees (similar with those in 2007).
In the eyes of ordinary people, investment banks benefit from the culture of the ‘Heads – I win, tails – you lose, remain unaffected by the suffering, which caused huge bets on the institutions in the wake of the credit boom.
However, higher scores reflect the potential gains that can be done by focusing on so-called flow business (sales and marketing of simple products such as securities with fixed income and currencies on behalf of clients) rather than risk a trade own expense.
European giants in this field, such as Deutsche Bank, Credit Suisse and Barclays Capital, is identified as one of the biggest financial crisis after winning, „said Hugh Van Stenis from Morgan Stanley. In the U.S. this type of business and earn Goldman JPMorgan. „In terms of tighter regulation, higher capital costs and uncertain markets to achieve scale and efficiency in handling customer orders is the right strategic response,“ says Van Stenis.
The so-called FICC business of banks (securities trading fixed income, currencies and raw materials) remains the main driver of revenue and is the source of over half the revenue from investment banking in 8 of the 13 leading banks.
Since the margins in this part of the business accounts, reported third-quarter revival in derivatives and the issuance of shares. Non-performing loans and write-downs in the value of business properties proved to be not as bad as expected.
Not all investment banks, however, piling the same profits. UBS, which was among the hardest hit, reported revenues in FICC amount of 985 million Swiss francs ($ 977 million) in the third quarter, its first positive result for the last nine quarters. This is a small step for the unit, abandoned by most of its leading cadres. UBS is lagging behind its competitors – with over $ 2 billion from Deutsche Bank and $ 1.5 billion from Credit Suisse.
With the approaching end of the year’s biggest question is what will be a successful strategy for investment banks in 2010-a. Low interest rates coupled with higher confidence and lower corporate market volatility are likely heralds a more active market for mergers and acquisitions. Investment banks and foretaste of enjoyment possible wave of initial public offerings after being forced to idle more than 18 months. This means that we can see a return to more familiar pattern of gains in which financial institutions will receive a larger share of their revenue from consulting services transactions.
Regardless of where the money comes from their furor around bonuses would hardly quiet. And success in 2009 may have triggered changes that will reverberate in the industry for years.