Executives from JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N) and Goldman Sachs Group Inc (GS.N) warned on Tuesday that trading conditions during the third quarter were likely to be poor for their banks.
Revenue from trading of stocks and bonds continues to suffer from decreased market activity and volatility, the executives said, speaking at a conference in New York sponsored by Barclays Plc.
Bank of America sees revenue from trading stocks and bonds likely to decline around 15 percent in the third quarter compared with the year-ago period, its chief financial officer, Paul Donofrio, said.
JPMorgan Chief Executive Jamie Dimon gave an even more downbeat forecast for his bank, predicting a 20 percent drop in trading revenue. Dimon said he may stop giving trading guidance because investors were too focused on short-term results.
Goldman President Harvey Schwartz said conditions for fixed-income trading have not improved much since the beginning of the year, but he declined to be specific.
“The market environment in the third quarter feels like thefirst and second quarter,” Schwartz said. For fixed income, currency and commodities, he said, “it’s still a pretty challenging environment.”
In the second quarter, Goldman reported a 40 percent drop inbond trading revenue and the weakest commodities results in its history as a public company.
The company is taking steps to grow its fixed income trading business, including courting a greater number of asset managers and banks to trade with the firm and expanding its footprint with corporate clients.
Other banks also expect a trading slump during the third quarter.
Citigroup Inc (C.N) may see revenue in stock and bond trading drop as much as 15 percent during the period, CFO John Gerspach said on Monday.