(Bloomberg) -- Barclays Plc and Societe Generale SA joined in the stock-trading bonanza that’s helped big banks reap more than $30 billion in revenue so far this year.
Both companies reported equities-trading revenue that topped analysts’ expectations for the second quarter. While US banks continue to dominate the league tables for the business, Barclays and SocGen reported revenue gains that topped a raft of rivals, including JPMorgan Chase & Co. and Bank of America Corp.
Strengthening stock prices around the world have fueled activity on trading desks for much of this year. The performance has been so good that Morgan Stanley Chief Executive Officer Ted Pick — who previously spent years leading the firm’s stock unit before taking the reins of the Wall Street giant earlier this year — labeled it “an equities world.”
At Barclays, stronger-than-expected equities-trading revenue helped counter a decline in fixed-income trading revenue, which is a far bigger business for the British bank. The bank has been working to improve its market share in European rates and securitized products as it seeks to boost revenue from that business.
“Our traders have been able to capitalize on client demand, on increasing volatility and providing the kind of innovative derivatives solutions that clients seek from Barclays,” CEO C.S. Venkatakrishnan said Thursday in a Bloomberg Television interview. “I do expect, as market volatility keeps apace, for our performance in equities to continue.”
At SocGen, though, the trading results weren’t enough to overcome woes in its domestic retail unit. The lender’s shares slumped as much as 8.3% Thursday morning after it reported that it’s still suffering from ill-timed hedging decisions it made a couple of years ago.
Still, the results bode well for rival UBS Group AG, which is expected to report second-quarter earnings later this month. The bank has spent years investing in its equities division, and analysts expect it to report a €1.15 billion stock-trading haul in the second quarter.
So far, US lenders have remained atop the league tables for equities trading. Morgan Stanley used to handily claim the title of biggest stock-trading shop on the street but, in recent years, Goldman Sachs Group Inc. and JPMorgan have, at times, muscled into the top spot.
Goldman took first place in the three months through June, with a $3.17 billion haul, and Morgan Stanley came in second.
--With assistance from Katherine Doherty, Alexandre Rajbhandari, Donal Griffin, Jonathan Ferro and Lisa Abramowicz.
(Updates with comment from Barclays CEO in fifth paragraph.)
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