Investment banks need 'surgical assessment' to lift returns

摘要

Investment banks' return on equity could slump to just 3.4% in 2017 from already depressed levels as falling revenues and rising regulation continue to pound the industry, a business consultancy says. Investment banking revenues are forecast to fall to US$212bn this year, down 7% from US$228bn in 2015 and down 22% from US$271bn in 2010, the Boston Consulting Group said last week. Last year was already the worst year for revenues since 2009. Revenues from fixed income, currencies and commodities (FICC) fell 8% last year to US$107bn. Primary markets revenues fell 6% to US$58bn, while equities revenues rose 3% to US$62bn, aided by stock market volatility. Investment banking revenues have been hurt in recent years by unfavourable economic conditions and a structural shift in the industry that has been exacerbated by higher capital requirements and increased cost bases.