LONDON (Reuters) - After suffering the worst first quarter since the global financial crisis, investment banks should brace for further significant revenue declines of nearly 40 percent in the second quarter, according to a report on Wednesday.
U.S. banks are expected to fare better than their European counterparts, but trading conditions for all banks across all asset classes will remain tough, according to preliminary estimates from data analytics firm Tricumen.
"U.S. markets on the whole are doing better than European markets, and U.S. banks have a stronger position in their market than European banks," said Darko Kapor, partner at Tricumen.
Deutsche Bank will be the biggest underperformer, with overall revenues from market trading seen falling 35 percent in the second quarter compared to the same period last year.
Bank of America is expected to perform "relatively well", chalking up a 20 percent decline in revenues, Tricumen said.
Bank of America, JP Morgan and Citi are expected to be the strongest performers in fixed income, currency and commodity (FICC) trading, with revenue falling 18-21 percent on the same period last year.
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Tricumen expects Credit Suisse to be the worst performer in FICC trading, with revenues falling 37 percent, followed by Deutsche with a 34 percent fall.
Credit Suisse and Deutsche have been among the hardest hit as banks comply with new regulations forcing them to hold more capital, reduce risk-taking and scale back market-making activities, all of which are squeezing liquidity from an array of capital markets.
Revenue at the world's 12 largest investment banks fell 25 percent in the first quarter from a year ago as economic uncertainty and investor caution led to the slowest start since the financial crisis, data from industry analytics firm Coalition showed.
In equities, Bank of America and JP Morgan will be the strongest performers on a relative basis (-22 percent and -23 percent, respectively). Germany's Deutsche and Switzerland's UBS are again expected to underperform (-38 percent and -35 percent, respectively).
Barclays may be hit by its withdrawal from cash equities trading in Asia, Tricumen said, forecasting a 37 percent decline in revenues.
(Reporting by Jamie McGeever; Editing by Angus MacSwan)