JPMorgan Traders’ Market-Share Inroads Growing, Deutsche Bank Analyst Says

JP Morgan

As reported by Bloomberg’s Dawn Kopecki:

JPMorgan Chase & Co., the most profitable U.S. bank, is taking trading revenue from competitors as investments including its $1.7 billion purchase of RBS Sempra’s commodities business begin paying off, Deutsche Bank AG analysts said.

JPMorgan’s share of total trading revenue among the top five broker-dealers has risen to as much as 26 percent over the past two quarters from as much as 22 percent over the previous nine months, Deutsche Bank analysts Matt O’Connor and David Ho told clients in a research note after meeting with Chief Financial Officer Doug Braunstein yesterday.

“We came away more confident than ever that share gains in FICC trading are sustainable as management noted that strong relative trading results recently reflect the benefits of investment spend over the past couple of years,” the analysts said, referring to JPMorgan’s fixed-income, interest-rate, currency and commodities trading unit.

JPMorgan is already seeing higher trading revenue per client as a result of its capital markets investments, O’Connor and Ho wrote.

First-quarter net income for the New York-based bank climbed to a record $5.56 billion. Almost 43 percent of that profit came from the investment bank, where earnings fell 4 percent to $2.37 billion from a year earlier. Fixed-income and equity markets revenue, where trading results are reported, was $6.6 billion, or 81 percent of the investment bank’s revenue in the first quarter.

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