Last checked at 
By Steve Slater
LONDON, Sept 30 (Reuters) - Political troubles in Russia andthe Middle East added to a summer slowdown in trading activityand is likely to leave third quarter revenues for investmentbanks down from the previous three months, bankers and analystssaid.
Investment bank revenues can be one of the most volatileaspects of bank earnings. Banks are likely to cut more jobs andpare back businesses in any areas that remain weak in an effortto save costs.
Swiss bank UBS and Britain's Royal Bank ofScotland told a financial industry conference on Tuesdaythat investment bank revenues had remained subdued in the thirdquarter.
Most banks are still expected to report revenues higher thana year ago, saved by a pick-up in activity in September,typically crucial given the seasonal lull in July and August.
Major U.S. and European banks will report third-quarterearnings results from mid-October. Few banks have given guidanceon their performance for the quarter, which ends on Tuesday.
Tom Naratil, chief financial officer for UBS, saidgeopolitical uncertainty and concerns about monetary policy andglobal growth are keeping clients cautious, echoing comments thebank made at its second quarter results at the end of July.
"We continued to see an environment that is concerning toclients, whether they are institutional clients or wealthmanagement clients," Naratil said at the conference in London.
RBS said its corporate and institutional banking revenues,which include its investment bank, had been weaker than expectedin the third quarter, without going into detail.
Both UBS and RBS have shrunk their investment banks inrecent years to shield them from volatility and risk. Analystspredict most investment banks will show a fall in revenue fromthe second quarter to the third.
Recent geopolitical concerns have revolved around Russia andthe Middle East, but street protests in Hong Kong may haveweighed on Asian-focused investment banks HSBC andStandard Chartered. Their shares have shed around 6percent and 8 percent respectively over the past week or so.
Analysts at JPMorgan this week forecast revenues for the topinvestment banks will be down about 13 percent in the thirdquarter from the previous three months. Compared to a year ago,revenues are forecast to be up 12 percent on average.
Fixed income, currencies and commodities (FICC) businesses,which accounted for about half investment banks' revenues, haveslumped in recent years on the back of tougher regulations andlow market volatility.
Executives from JPMorgan and Barclays bothsaid earlier this month there were signs that September wouldhelp them recover from the subdued summer.
Marianne Lake, JPMorgan's chief financial officer, said onSept. 9 she expected revenues to be down from its strong thirdquarter in 2013, but by less than the 12 percent year-on-yeardecline it showed in the first six months of this year.
After subdued trading across all markets earlier this year,a more varied landscape had emerged, Lake said. Interest rateproducts remained weak given a low interest rate environment,but there had been an improvement in foreign exchange tradingand emerging markets, she said.
JPMorgan's analysts predicted fixed income revenues in thethird quarter would be down 17 percent from the second quarter,but come in 12 percent higher than a year ago.
Advisory and origination income should dip 12 percent from astrong second quarter but be up 30 percent on the year. Equitiesrevenue is expected to drop 11 percent on the quarter and 4percent from a year ago, the analysts said. (Reporting by Steve Slater; Editing by Elaine Hardcastle)
