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JP Morgan, Citi win bigger share of investment banking revenue

Traders work at the post that trades JP Morgan on the floor of the New York Stock Exchange May 11, 2012. REUTERS/Brendan McDermid

LONDON (Reuters) - U.S. investment banks JPMorgan Chase & Co and Citi saw their share of investment banking revenue increase more than any of their peers in the first nine months of the year, new research showed on Thursday.

Among the 13 investment banks tracked by research firm Tricumen, JP Morgan and Citi each saw their share of operating revenue rise 0.7 percentage points over the period.

Tricumen partner Darko Kapor said JPMorgan's performance stemmed from continued strength in equity and debt capital markets, which are among its biggest businesses, as well as a strong third quarter in interest rates, foreign exchange, credit and equity derivatives trading, where it outpaced most peers.

Year-to-date, JPMorgan earned the most from capital markets, making operating revenue of $19.5 billion, ahead of Goldman Sachs and Citi, which made $17.9 billion and $15 billion respectively, a Tricumen ranking showed.

The report will be welcome news to JPMorgan, which last month posted its first quarterly loss under Chief Executive Jamie Dimon, and faces over a dozen legal probes globally.

Tricumen said Citi's gains stemmed from the resilience of its fixed income, currency and commodities (FICC) trading revenues, an area where many of its competitors saw revenues battered in the third quarter.

Britain-based Tricumen tracks data from Bank of America Merrill Lynch, Barclays, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, Royal Bank of Scotland, Societe Generale and UBS.

French bank Societe Generale also saw its share of revenue increase by 0.7 percentage points, though it remains a much smaller player than its peers.

Kapor said SocGen has been increasing its revenue share throughout the year through its activities in debt capital markets, where it seems to have found a way to increase or at least maintain margin.

Goldman Sachs was among the biggest losers, seeing its share of revenue drop by 0.7 percentage points after a tough third quarter, according to Tricumen.

Revenue from FICC trading for clients, one of Goldman's biggest businesses, tumbled 47 percent in the quarter, Goldman reported in October.

Switzerland's UBS, however, was the worst performer. Its share of revenue slipped 1.1 percentage points due its pull back from FICC.

Separately on Thursday, research by analytics firm Coalition forecast revenue at the top 10 global investment banks to decline by 5 percent to $151.7 billion in 2013 due to weak returns from FICC activities.

FICC revenues are expected to fall 20 percent year-on-year to $73.6 billion after a decline in institutional client activity, the absence of another European Central Bank long-term refinancing operation (LTRO) and bankers holding off trading in anticipation of interest rates rises, Coalition said.

Equities, however, are forecast to deliver their best return since 2010, with revenues up 22 percent year-on-year at $40.9 billion, while investment banking will see revenues rise 10 percent to $37.2 billion, Coalition's report showed.

Coalition includes data from Bank of America Merrill Lynch, Barclays, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Morgan Stanley and UBS.

(Reporting by Clare Hutchison; Editing by Mark Potter)