US Banks Capitalize on Volatility for Trading Profits... "Expecting $100 Billion This Year"

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Amid the increased market volatility caused by the COVID-19 pandemic, major U.S. banks are raking in trading profits. Bloomberg reported on the 15th (local time) that the top five U.S. banks are expected to secure $100 billion in trading revenue this year for the first time in 10 years.

According to the report, the trading revenue of the top five Wall Street investment banks, including JP Morgan, Goldman Sachs, and Morgan Stanley, reached $84 billion through the third quarter of this year. This surpasses the annual trading revenue achieved since 2010, and it is projected to reach $100 billion this year. The top five U.S. banks recorded $88.1 billion in trading revenue in 2010 but have since fallen below $80 billion.

In particular, JP Morgan, Goldman Sachs, and Morgan Stanley all saw their trading revenue increase by more than 20% year-over-year in the third quarter. Based on this, Goldman Sachs recorded its highest-ever earnings per share, and Morgan Stanley posted its second-largest net profit in history, Bloomberg reported. Bloomberg explained, "While banks had to build loan loss provisions in the first half of this year, trading revenue after the pandemic helped offset the decline in consumer sector earnings."

Despite the increase in trading revenue, major investment banks remain concerned about uncertainty. They believe that without additional stimulus measures, it will be difficult to escape a recession, as businesses and households are currently holding on due to existing stimulus packages. Additionally, the unemployment rate remains high, making it difficult to rule out the possibility of a wave of defaults after next year.

This content was produced with the assistance of AI translation services.