Investment banking revenues in the current quarter are set to drop 7 percentfrom the third quarter and 14 percent from a year ago due to weakness in fixedincome, commodities and currencies (FICC) and equities, analysts at JPMorgansay.
Income in FICC, which accounts for the bulk of investment banks' revenue, islikely to be down 17 percent from the third quarter, excluding Goldman Sachs and Barclays, and down 29 percent from the fourth quarter of2012, JPMorgan says. Analyst Kian Abouhossein says weak foreign exchange,commodities and rates will be partly offset by strong credit and a recent pickup in rates.
Equities revenues is forecast to drop 12 percent from the third quarter, butrise 15 percent from a year ago. Advisory and investment banking income isexpected to be up 6 percent from the previous quarter, but fall 15 percent onthe year, Abouhossein says in a note on Tuesday.
Investment banks have been hit hard by a slump in FICC revenues this year,hurt by tougher regulations and uncertainty over U.S. monetary policy, whichsapped activity over the summer.
The STOXX Europe 600 Banks Index was down 0.3 percent at 190 pointsby 0940 GMT.
Reuters messaging rm://steve.slater.thomsonreuters.com@reuters.net (Reporting by Steve Slater)