Total global turnover rose from $125 trillion in 2006 to $175 trillion in 2007, according to the latest foreign exchange survey from Euromoney. The number of respondents to the survey rose by 17.5% to 9,810 valid replies.
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Key points:
- Turnover rises 41% to a record $175 trillion
- Deutsche Bank extends lead with 21.7% share of global market
- UBS consolidates second place with growing 15.8% share
- Barclays Capital breaks into top three global banks
- JPMorgan, Lehman Brothers and Dresdner Kleinwort post strong gains
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The growth in the foreign exchange market shows that it has been unaffected by the global credit crisis; indeed, many of the world’s largest banks are focused on FX as a market for continued growth while other asset classes decline.
“Far from being the commoditized product with limited growth that many have sought to describe it as, FX has proved once again that it is a thriving asset. Furthermore, with products ranging from simple to complex, it is a transparent asset that has something to offer everyone,” said Euromoney’s editor Clive Horwood.
“Over the years, FX has periodically had to face challenges from many a new product. On occasions, this has resulted in resources being diverted to other areas that have promised, but not always delivered, better returns. But FX always manages to stage a comeback and it would seem that those in charge of sell-side institutions have learnt that many of the higher-margin products that have attracted their business investment are simply not as reliable a profit stream in the longer term as FX.”
Deutsche Bank once again is the largest foreign exchange bank by volume. Its share of global turnover broke the 20% barrier for the first time this year.
“We’ve been consistently growing by double-digit percentages over the past few years, and by high double-digit percentages more recently,” said Zar Amrolia, global head of foreign exchange at Deutsche Bank. “I believe the FX market is the most competitive market, and that drives innovation – whether it’s new clients entering the market, such as the algo traders and retail aggregators, whether it’s been product innovation on the derivatives product side such as portable alpha indices or beta replication, whether it’s using new mechanisms for distribution of pricing such as the internet or operational efficiencies such as prime brokerage and CLS. The talent entering the industry is immense and the macro trends of globalization and increased trading of emerging market currencies means that the future is bright.”
UBS consolidated its position in second place, posting a strong gain in market share from 14.8% to 15.8%. Barclays Capital breaks into the top three overall, boosting its share of the market from 8.8% to 9.1% and leapfrogging Citi and RBS in the process.
Other banks to perform strongly this year are JPMorgan (up from 9th to 6th); Lehman Brothers (8th this year, 11th last year); and Dresdner Kleinwort (up from 18th to 12th).
Among the noticeable fallers were Bank of America (down from 6th to 11th) and Merrill Lynch (falling from 13th to 15th). Both US firms have suffered high turnover among senior FX management over the past 12 months.
Banks and non-bank financial services institutions showed the strongest growth in turnover, both reporting gains of over 50%. FX trading platforms continue to grow, with turnover rising 37% on last year.
The diversification of the FX business beyond traditional centres in Western Europe and North America was demonstrated by dramatic growth in reported turnover in Asia (+117%), Central & Eastern Europe (+254%), the Middle East (+42%) and Latin America (+145%).
The top 20 global foreign exchange banks by turnover are as follows:
Overall Market Share 2008
| 2008 |
2007 |
Bank |
Market share |
| 1 |
1 |
Deutsche Bank |
21.70% |
| 2 |
2 |
UBS |
15.80% |
| 3 |
5 |
Barclays Capital |
9.12% |
| 4 |
3 |
Citi |
7.49% |
| 5 |
4 |
RBS |
7.30% |
| 6 |
9 |
JPMorgan |
4.19% |
| 7 |
7 |
HSBC |
4.10% |
| 8 |
11 |
Lehman Brothers |
3.58% |
| 9 |
8 |
Goldman Sachs |
3.47% |
| 10 |
10 |
Morgan Stanley |
2.56% |
| 11 |
6 |
Bank of America |
2.23% |
| 12 |
18 |
Dresdner |
1.63% |
| 13 |
15 |
BNP Paribas |
1.62% |
| 14 |
17 |
Credit Suisse |
1.51% |
| 15 |
13 |
Merrill Lynch |
1.24% |
| 16 |
12 |
ABN Amro |
1.21% |
| 17 |
14 |
Calyon |
1.04% |
| 18 |
20 |
Société Générale |
0.89% |
| 19 |
19 |
Royal Bank of Canada |
0.72% |
| 20 |
21 |
SEB |
0.62% |
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Source: Euromoney |
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The full set of results of the Euromoney foreign exchange survey were announced on the evening of May 7, at Euromoney’s annual FX market awards dinner.
From May 7 headline results are available to Euromoney subscribers. A more extensive set of results can be accessed by subscribers to Euromoney’s foreign exchange news service, The weeklyFiX, at www.euromoneyfix.com.
These will include a breakdown of market shares by client type and region. For more information about the poll, please contact Euromoney’s head of research, Andrew Newby, at anewby@euromoney.com.