A gangbusters quarter in equities trading is set to push banks’ global markets revenues to new heights, as the volatility that has prevailed for much of the year delivers another record haul for trading divisions.
Banks are projected to generate a record US$169bn of global markets revenues in the first half, according to benchmarking firm BCG Expand. That is 16% above the same period in 2025 when banks’ client-facing marketmaking activities secured their highest revenue total in history.
Equities traders led the charge as banks seized on a flurry of client activity around the Iran war and the AI boom, as well as heightened investor demand to leverage positions. BCG Expand forecasts a 31% rise in equities revenues in the first half to US$67bn to extend a remarkable stretch of record-breaking growth, while fixed income should climb 7% to US$101bn.
“It is going to be one of the strongest ever quarters for banks in sales and trading,” said Amrit Shahani, partner at BCG Expand.
“Most asset classes across equities and fixed income have benefited from the market volatility. There is also increased demand for financing,” he said, pointing to record highs for equity prime balances and revenues from securitisation warehousing and structured financing.
Fertile ground
This year has provided a fertile backdrop for trading desks that make money from brokering flows from institutional investors and corporations. A near-constant stream of news around the Iran war, central bank policy and the AI boom has triggered wild market swings, prompting clients to reshuffle positions.
Stock markets have also recovered from a sharp drop at the start of the Iran war to post fresh highs, stoking demand for bank financing facilities to leverage positions. That has set the scene for more revenue records to tumble, a now familiar occurrence since the pandemic in 2020 ushered in a period of greater volatility – and with it structurally higher markets revenues for global investment banks.
Equities has been a particular bright spot. Goldman Sachs is set to report its highest ever quarterly revenue haul in equities trading in the three months to the end of June, according to sources familiar the matter, beating the record US$5.3bn in the first quarter. Morgan Stanley and JP Morgan, the other two largest equities trading banks, are also set to report record equities revenues in the quarter, sources said.
Spokespeople for all three banks declined to comment.
Gung-ho
Senior bank equities traders have signalled privately that revenues in the second quarter are now up as much 50% year on year from an already high base. Client activity in June reportedly went through the roof as feverish trading around AI companies contributed to a bumper period for marketmaking desks. Asia, in particular, has been an important engine for growth amid frenzied trading in South Korea, Taiwan, Hong Kong and Japan.
“A lot more of the activity and revenue has been coming from the equities business … probably for the last 12 months,” said Jim DeMare, Bank of America’s co-president, speaking at an industry conference on June 9. “Within that, there’s a lot of desire to access Asia … That’s been a high area of growth; it delivers strong returns.”
DeMare said BofA’s markets revenues would increase by more than 15% in the quarter from a year earlier. Other bank executives have also alluded to the heady environment for trading and dealmaking.
“It’s gung-ho, folks,” Jamie Dimon, JP Morgan’s longstanding chief executive, told an investor conference in late May. Dimon said at the time that JP Morgan might report markets revenues that were “a little better” than analyst estimates of 11% year-on-year growth.
Fixed income strength
Fixed income divisions also performed strongly after a mixed first quarter. Rates trading desks struggled after the outbreak of the Iran war triggered dramatic swings in government bond markets. Goldman was the most high-profile casualty when it reported a surprise 10% first-quarter drop in fixed income revenues on the back of significantly lower rates revenues.
Goldman’s rates trading operations rebounded strongly in the second quarter, however, according to sources familiar with the matter, in what proved to be a far more positive period for interest rate traders across the industry.
Commodities traders also booked hefty profits as they capitalised on the volatility engulfing markets following the war in Iran. Morgan Stanley is one firm to register a strong performance in commodities, according to sources, with the bank’s oil traders in particular having a standout quarter.
Nevertheless, it is banks’ equities traders that will capture the headlines as they continue an extraordinary run of powering banks’ markets divisions higher. It will be the fourth straight year that banks’ equities revenues have broken records in the first half, according to BCG Expand. Overall, equity revenues have more than doubled since 2019, compared with a more modest 38% growth in fixed income.
DeMare noted that the size of equity and debt markets has grown materially over that time resulting in much more activity. BofA’s trading volumes in equities, for instance, have more than doubled since before the pandemic.
“[We have] larger markets, more volume, higher prices – and getting a piece of that is valuable,” DeMare said.
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