JPMorgan's Jamie Dimon expects trading revenues to fall sharply, possibly by as much as half
JPMorgan and Citigroup are the two biggest fixed income dealers and their second-quarter results on Tuesday confirmed another surge in debt trading revenues.
JPMorgan generated $7.3 billion of fixed income trading revenue for a 99% increase over the same quarter in 2019, while Citi produced $5.59 billion for a 68% rise.
The two banks were also beneficiaries of the Federal Reserve-sponsored boom in corporate bond issuance. JPMorgan’s debt capital markets revenue rose by 55% compared with the second quarter of 2019, for a total of $1.26 billion, while Citi increased bond underwriting income by 41% to just over $1 billion.
When things get bad in trading, spreads gap out – and all of sudden you’re making money in trading - Jamie Dimon, JPMorgan
JPMorgan’s value-at-risk for its corporate and investment bank also increased sharply to $127 million, for a rise of 189% compared with the second quarter of 2019, and 119% compared with the first quarter of 2020.
