This content was published on
July 29, 2026 - 13:05
4 minutes
(Bloomberg) — After UBS Group AG reported that its equities traders reeled in 53% more revenue than a year ago, hitting over $2.3 billion two quarters in a row, Stefan Stalmann, an analyst at Autonomous Research, praised it with a caveat.“I wanted to start with your very strong performance in equities trading,” he said on the bank’s call to discuss the second-quarter earnings. “Not quite as good as the US banks, but it’s better than your European peers that have reported so far.”For Europe’s largest banks, it’s no longer enough to win over investors and analysts by showing revenue growth at a double-digit rate. Banks with hefty trading operations need to prove they can compete with Wall Street’s largest, many of which shattered revenue records in the second quarter.On Tuesday, Barclays Plc reported investment banking revenues that were stronger than analysts had expected. But a 45% jump in revenue from trading stocks wasn’t enough to excite investors or overshadow smaller misses elsewhere at the British lender. Shares dropped almost 5%.Many Wall Street banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., said they had a record three months from April through June, thanks to volatility across equity markets. Clients pushed banks to consistently reposition their holdings as the US-Iran war dragged on and stocks of artificial intelligence-related companies rallied. For Goldman, net revenues from stocks trading came in at $7.42 billion, 72% higher than the second quarter of 2025.That’s created a higher bar for European investment banks to clear. Deutsche Bank AG said Wednesday its fixed income traders hauled in €2.6 billion ($3 billion) of revenue during the period, up 16% from a year ago. That increase beat out the average reported by its US rivals of 13%. The German lending giant’s stock rose as much as 6%.Deutsche Bank “bucked the broader trend and showed a strong FICC performance,” Jefferies Financial Group Inc. analyst Joseph Dickerson wrote in a note on Wednesday.But in some cases, strong trading results haven’t been enough to sway investors to buy into the stock.For BNP Paribas SA, analysts from Deutsche Bank and Bloomberg Intelligence both deemed ahead of the earnings announcement that the bank would be well positioned to benefit from market volatility, especially given the size of its stock trading business.BNP’s equities revenue jumped 43% in the second quarter to €1.4 billion, though its shares dropped more than 3% on July 23 when it reported earnings. The bank said it had to set aside more for potential bad loans than analysts had expected for the period.For Barclays, some were quick to point out that the investment bank revenues, while beating average analyst estimates, weren’t on par with US firms.“We would argue that market expectations had already moved higher post US bank reporting,” Citigroup Inc. analyst Andrew Coombs wrote in a note on Barclays, suggesting market consensus could have been higher.RBC Capital Markets analyst Benjamin Toms highlighted Barclays had “weaker performance than US peers” in investment banking.European and UK banks are also competing to grow their prime brokerage units — divisions involved in lending to hedge funds to help them handle trades — which is helping to boost equities revenue.UBS’ financing unit that houses that business saw revenue surge 40% in the quarter, according to its statement. Barclays said its uptick in equities income in the second quarter was helped by prime financing.But even in that space, the lenders will be up against Wall Street’s might.At Goldman, for example, its equities revenues were partly driven by prime financing. Citigroup’s prime brokerage balances jumped 60% from a year earlier. The US bank is planning to increase its headcount in its Asia-Pacific prime brokerage unit by about 10% in 2026, while aiming to boost its overall total prime brokerage balances to more than $700 billion by 2028.–With assistance from Nicholas Comfort and Jeff Black.©2026 Bloomberg L.P.
