From Collins Stewart’s banking analyst, Alex Potter:
And from the note:
Debt trading revenues have moved heavily negative since 4Q07, of which more later. Within the other revenue lines, the only areas of any resilience have been equity trading and corporate advisory (including M&A) sadly, UK banks are, generally, underweight such investment banking revenues.
Back to the US:
It is clear that, as revenues deteriorated, the banks attempted to take major year-end write-offs to ring-fence the asset quality issues within 2007. This has evidently failed and, following the Lehman, AIG, FNM and FRE events in 3Q08, we feel the fourth quarter will be the weakest of this year.
Goldman Sachs and Morgan Stanley will be the first US investment banks to post their fourth-quarter results next week…
Related link:
Mo’ problem assets, mo’ problems - FT Alphaville
_______
