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.