Bloomberg News reports that pretax profit at the banking and trading units at seven of the nine largest firms fell in the first six months as costs for the group decreased less than 1% from the same period a year earlier, according to data compiled by Bloomberg. Revenue dropped 5%, driven by the worst first-half trading results since the financial crisis.
Banks have relied on cost-cutting in recent years as higher capital requirements and fixed-income trading revenue crimped by low interest rates eroded profit. JPMorgan is eliminating hundreds of technology-support employees at its corporate and investment bank, people with knowledge of the move said. Credit Suisse said last week it would cut expenses by exiting commodities trading and scaling back currency and rates businesses.
'You’re always overstaffed at the bottom and understaffed at the top', said Jason Goldberg, a Barclays analyst in New York who covers U.S. banks. 'It’s a tough balance between cutting costs and wanting to have enough people around for when volatility and activity pick up'.
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