Record Q3 for US banks

Morgan Stanley, Goldman Sachs and Lehman Brothers all posted strong Q3 results from their fixed-income divisions over the same period last year.

Morgan Stanley led the way with a 63% rise in net revenues from fixed- income sales and trading, reaching $2 billion. The bank said growth was driven by strong performances in interest rate, currency and credit products. Strong new deal activity and successful positioning in interest rate and FX drove up revenues, while the banks saw significantly higher revenues in emerging markets.

Similarly, the fixed income, commodities and currencies division of Goldman Sachs was up 41% over the third quarter of last year. The division broke previous records, with net revenues of $2.63 billion coming from "significantly higher" net revenues in credit products and currencies. The banks said net revenues were also higher in mortgages, while results in commodities and interest rate products were strong, but lower than the third quarter of last year.

Lehman Brothers' fixed-income business reported net revenues of $1.9 billion in the third quarter, up 37% from $1.4 billion in the third quarter of fiscal 2004 (FX Week, September 12). The bank partially attributed its performance to an improved quarter from the credit and interest rate business lines.

However, despite forex-driven record results from the interest rates business, Bear Stearns posted a 4% drop in net revenues from its fixed-income division. Net revenues from the division fell to $739.2 million in Q3 this year from $774.0 million reported for same period last year.