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| Best Flow house: Deutsche Bank |
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| Also shortlisted: Barclays, Citi and HSBC |
Sluggish client trading volumes and the onslaught of new financial regulation threw up big challenges for the flow business in the past year. These will define its future direction.
Skittishness among investors in uncertain times might dissipate at some point, pushing volumes back up, but Basle III, Dodd-Frank and European Market Infrastructure Regulationwill have a long-term impact.
This, in turn, is forcing the flow monster banks that still ultimately dominate dealing in credit, foreign exchange, rates, commodities and equities to be much smarter in how they do this.
All of the big flow houses – Barclays, Citi, JPMorgan – have reshaped their businesses and continue to command healthy market shares, but the bank that has done so best is Deutsche Bank.
Deutsche not only commands leading market positions in each of the core flow asset classes, it has managed to maintain this leadership while slashing costs, risk exposure and its balance sheet.
It reduced its risk-weighted assets by €103 billion in the year to the end of the first quarter and cut costs by €600 million, all of which might have led to a fall in its market share – but it didn’t.