- Barclays brought in about $250 million in trading revenue on March 16, the day after the Federal Reserve slashed interest rates, people briefed on the performance told Business Insider.
- The revenue came from the bank’s global trading desks, according to the people. Barclays ranked as the seventh-biggest investment bank in the world in 2018, according to the latest Coalition figures available.
- Barclays isn’t the only trading desk that’s done well. JPMorgan has notched record volumes across a number of trading desks as clients looked to change their positions.
- Visit BI Prime for more stories.
Barclays’ traders turned in a monster trading day in the latest sign that the market rout has been good for Wall Street trading desks.
The bank’s global markets business reaped about $250 million in revenue last Monday, March 16, according to people with knowledge of the performance. The revenue gains came across the trading franchise, including equity derivatives, according to one of the people.
For Barclays, the performance bolsters CEO Jes Staley’s decision to stand by the British bank’s market-making businesses in spite of shareholder pressure to get rid of the units. Staley, a former chief of JPMorgan’s investment bank, has committed to the business and communicated a vision for Barclays to be one of the only European banks with a top-tier investment bank.
Barclays’ performance came a day after the Federal Reserve made a surprise decision last Sunday to slash interest rates to near zero to help bolster a US economy reeling from the coronavirus and government demands for some citizens to shelter in place. Prices for bonds rise when interest rates fall, providing a boost to inventory banks may have on their balance sheets.
Barclays was the 7th-ranked investment bank through 2018, according to data provider Coalition Ltd. Rankings for 2019 aren’t available yet.
The bank’s franchise in G10 rates, G10 foreign exchange, credit, and prime brokerage all ranked between fourth and sixth, the highest rankings of any of its trading businesses, according to the Coalition data.
Barclays isn’t the only trading operation to do well. On March 10, Bloomberg reported JPMorgan and Citigroup had brought in about $500 million more in revenue this year as at the same time last year across their equity derivatives franchises. The wire service said trading spiked as investors moved to protect their stock portfolios from historic declines.
At JPMorgan, trading volumes reached records across many products, a person who has seen the figures told Business Insider. On March 9, the bank traded a record amount of shares in the US. In foreign-exchange, four of JPMorgan’s top 10 all-time volume days were in a two-week period at the end of February and into March, the figures show. Trading in interest rates, futures, and algorithmic execution all reached records as well.
Banks are taking advantage of nearly unprecedented moves in markets. The US stock market is now in bear market territory after slumping more than 30% from the highs of the year on fears the coronavirus will bring economic life to a standstill.
The market moves have brought a huge amount of volatility to the markets as well, which can make it difficult for trading desks to manage. One the day Barclays made its money, the CBOE Volatility Index, known as the VIX, spiked near levels last seen in 2008.
The VIX, surged to as high as 76 that day, short of the index high of nearly 90, set in October 2008. Two weeks ago, the VIX surged to its highest level since December 2008, and it has remained elevated since. It closed Monday near 63.
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