Equity trading revenues
of the European banks plunged from $24 billion in 2007
to $13 billion in 2018
as the banks have shrunk their equity trading desks since the downturn. Per Trefis estimates, Equity Trading revenues are expected to gradually increase to $14 billion by 2024
, a figure roughly 40% less than the pre-crisis level of $24 billion.
This is evident from the fact that equity trading assets
stood at $770 billion in 2007
while this figure declined by roughly 60% to $307 billion in 2018
. The banks have restructured their business model around less complex and less capital-intensive activities, including retail banking and, in most cases, wealth management.
However, improved capital market valuation and consolidation in the industry should help Equity trading assets increase to $370 billion by 2024.
After declining sharply from 3.1% in 2007 to 1.9% in 2008, equity trading yield
for these banks spiked to 6% in 2009 before normalizing to 4.5% in 2012. The figure has largely nudged lower over subsequent years - sliding to 4.1% by 2018. We expect this figure to decline further to reach around 3.8% by 2024 due to the competitive nature of the trading business.