European banks report tough Q3 in Ficc

Barclays Capital, Credit Suisse and BNP Paribas all reported last week that revenue in fixed income, currencies and commodities (Ficc) fell during the third quarter, but foreign exchange might have boosted revenues in some cases.

Barclays Capital's revenue in Ficc declined to £1.4 billion in the third quarter, representing a 37% fall from the same period in 2010 and a 16% fall from the second quarter. But the bank said the fall in revenue reflected lower contributions from the credit, commodities and emerging markets businesses, which was partially offset by an improved performance in FX as a result of strong client volumes and group hedging activities.

The news follows announcements by UBS and Deutsche Bank last month that both had had a strong third quarter in foreign exchange, driven by higher levels of client activity than expected during the recent periods of volatility. Deutsche claimed to have delivered its best-ever third quarter in FX as a result of the uncertain macro environment, rising concerns over the eurozone crisis and big swings in major currencies.

Meanwhile, Credit Suisse reported fixed-income sales and trading revenue in the third quarter of Sfr762 million; a 48% decline from the same period in 2010 but a 28% increase on the second quarter. "Fixed-income sales and trading results were significantly lower than Q3 2010, reflecting challenging market-making conditions across most businesses," the bank said in a statement on November 1.

Lastly, third-quarter fixed-income revenue at BNP Paribas was down 33% on the same period in 2010, falling to €805 million. "The quarter was marked by sustained customer activity in flow products, while the credit and rates businesses were hard-hit by the sovereign debt crisis in a number of European countries," said the French bank.