JPMorgan’s trading revenue to shrink by 10% in third quarter, says ex-CFO Lake

JPMorgan’s sales and trading revenue will be down by 10% in the third quarter of 2021, while the investment banking fee boom is showing some signs of slowing down, according to Marianne Lake, its former chief financial officer.

Lake, who currently co-heads its consumer and community banking unit, signaled that the trading boom that supported large investment banks throughout the Covid-19 pandemic last year continues to slow. The bank will post a 10% decline on both the second quarter of 2021, and when compared to the third quarter of last year, she said.

“That is better than we expected at second quarter earnings,” she said at the Barclays financial services conference on 14 September. “We’re seeing particular strength in equities, a little less in FICC [fixed income currencies and commodities], but on an absolute basis we’re really happy with the performance in markets.”

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In the second quarter, investment banking activity surged to records as both equity capital markets and mergers and acquisitions activity hit new highs. This has helped offset the decline in trading revenues at most major firms, and dealmakers have said that activity shows little sign of slowing in the second half of 2021.

Lake, however, hinted that the third quarter was unlikely to match the highs of the previous three months. “We were expecting, and are seeing, a very robust investment banking environment. We expect fees to be up year-on-year, but down sequentially from strong second quarter,” she said.

To contact the author of this story with feedback or news, email Paul Clarke

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