U.S. Banks See Mixed Securities Services Revenues in Q1

Revenues from securities services grew at Citigroup during the first quarter, while J.P. Morgan and Bank of America witnessed significant declines.

Citigroup reported a 12% increase in securities services revenues to $543 million due to increased activity and higher client balances, according to the bank.

However at J.P. Morgan, securities services revenue was down 9% year-on-year to $934 million, largely due to an exodus of clients at the end of 2014.

“At the end of the fourth quarter of last year, there was a significant client exit and the (securities services) revenue impact of this is reflected in this quarter’s result,” says Marianne Lake, chief financial officer, J.P. Morgan.

The decline was also attributed to the impact of change in presentation, supply and revenue sharing agreements in its American Depositary Receipt (ADR) issuance business.

“For the remainder of 2015, given those two facts, we expect securities services revenue to be in the range of $950 million to $1 billion a quarter, depending on seasonality,” adds Lake.

Furthermore within Bank of America’s Global Markets unit, which includes services such as prime brokerage and clearing, revenue decreased from $4.9 billion in the first quarter last year to $4.6 billion this year. Net income was down $368 million to $945 million, reflecting lower fixed income sales and trading, and higher litigation expense.