DBRS Morningstar: European Firms' Q1 Capital Market Revenues Maintain Momentum

European firms with major capital market activities (including Credit Suisse Group, UBS Group, Deutsche Bank, Barclays, BNP Paribas and HSBC) enjoyed revenue momentum in Q1 and reported the best quarterly capital markets revenues since the beginning of the Coronavirus pandemic. Strong capital market revenue performance helped mitigate the impact of the default of Archegos Capital Management (Archegos), a US Family office that failed to meet margin calls at end of March 2021, and whose default negatively impacted the Q1 results at some European Firms.

Key highlights from DBRS Morningstar’s commentary include:

• European firms continued to show momentum in capital markets revenues in Q1, despite volatility levels gradually declining.

• Equity Sales & Trading and Equity Underwriting were the key revenue growth drivers this quarter.

• In Q1, US Peers outpaced the growth rates of European Firms, although some European Firms improved their Dealogic ranking in certain businesses.

“European Firms enjoyed business momentum in Q1 and reported, on aggregate, the best quarter for revenues since the beginning of the COVID-19 pandemic. However, we do not expect this level of performance to be repeated to the same extent in coming quarters, given we are seeing volatility falling back to pre-pandemic levels, which could translate into a slowdown in client activity, and the fact that Q1 is usually the strongest of the quarters.” said Maria Rivas, Senior Vice President from the DBRS Morningstar Financial Institutions team.

The commentary focuses on the Capital Market results of global banks. The full commentary “European Firms' Q1 Capital Market Revenues Maintain Momentum” is available at www.dbrsmorningstar.com.