The restructuring of the UBS investment bank is but one sign of a trend: the industry is in the middle of a downward spiral and sales are back to the levels of 2006.
The revenues at the biggest investment banks in the U.S. and Europe dropped 11 percent to $76.8 billion in the first half of 2019. This is the lowest volume since 2006, according to the Coalition research group.
The trade war, low-interest rates, slowing growth, and cautious clients combine to negatively affect the business environment for the banks.
Tough Times on European Stock Markets
Equity trading was taking the biggest hit, with revenues declining a full 17 percent. The implementation of MiFID II in Europe made it more difficult for banks to sell their products. Rumors have it that other players will follow the lead of Deutsche Bank and give up on equity trading, leaving the business to U.S. banks, according to a report in the «Financial Times» (behind paywall).
UBS meanwhile intends to merge the units designated to fixed income and equity trading. The revenues from fixed-income trading at the twelve biggest banks dropped 9 percent, while advisory and capital markets were down 8 percent, Coalition reported.
Banks have cut some 1,500 jobs in the six months through June 2019.
