loadingINVESTMENT BANKINGANDCAPITAL MARKETS
Market Report –First Quarter 2004 Edition
New York, Frankfurt
May 24, 2004
THE BOSTON CONSULTING GROUP
TABLE OF CONTENTS
Chapter Overview of First Quarter 2004
Global Investment-Banking Landscape
Market Review
?Corporate Finance and Advisory?Fixed-Income?Equity Trading?
FX Trading
Data Definitions and Abbreviations
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Overview of First Quarter 2004
Q1 2004 Market Report-BR-TM-NYC-24May04.ppt
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BANKS EARNED RECORD PROFITS IN THE
FIRST QUARTER OF 2004
BCGinvestment banking performance index climbed 40 points to a record level of 127.6 in the first quarter 2004
Investment banking results were again supported by strong gains in fixed income trading while profit margins remained high
?Trading revenues for the top 10 players grew by 50 percent from last quarter?
Profit margins of leading banks improved slightly to 35 percent on average
Banks increased their market risk levels significantly
?
UBSalmost doubled its market risk from Swiss Francs 300m a quarterago to Swiss Francs 518m(1)following its announcement in December last year to increase its
acceptable Value-at-Risk(1)limits from 450m to 600m Swiss Francs “to take advantage of trading conditions”
?
JPMChase and Citigroup increased market risk considerably, however, the increase translated only into moderated trading revenue gains in the current quarter
(1)UBSreports value-at-risk in Swiss Francs at a 99% confidence interval over a one dayobservation periodNote: Value-at-risk is a generally accepted measure to calculate market risk exposureSource:Company reports, BCG analysis
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BCGPERFORMANCE INDEX REACHED RECORD LEVELS IN
THE FIRST QUARTER OF 2004
BCGInvestment BankingIndex
Performance Index
140127.6120100.010090.596.291.087.480.18071.276.760.26051.844.748.2402020012002200301Q012Q013Q014Q011Q022Q023Q024Q021Q032Q033Q034Q031Q04Note:We revised the BCG IBperformance index this quarter and now calculate it based on aggregate profits of the top10 leading banks.
All previous numbers were restated accordingly Source:Company reports,BCGanalysis
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