Barclays Capital and Royal Bank of Scotland have emerged as big winners in the influential annual poll of the foreign exchange (forex) industry conducted by Euromoney.
Barclays Capital came third for the second year running, raising its market share from 9.12 per cent to 10.45 per cent, while RBS overtook Citigroup, the huge American bank, to take fourth place in the league table.
The results are significant because they come at a time when forex is becoming increasingly important as banks seek to rebuild profits after the credit blow-out.
Most of the industry’s big names have reported strong trading during the first three months — much of it because of forex success. This follows increased activity as businesses seek to manage their currency risk more carefully.
David Simmonds, head of research and strategy in RBS’s global banking and markets division, said that forex markets had become more volatile in recent months. He said that one of the factors had also been a decline in the popularity of the carry trade — in which investors sell low-yielding currencies, such as the Japanese yen, to invest in higher-yielding currencies, such as the Australian dollar.
Deutsche Bank emerged as winner of the poll — results of which were announced on Wednesday night at a dinner attended by more than 300 of the industry’s top names — for the fifth year running. The poll, now in its 30th year, is a benchmark for the industry: it measures market share by inviting market participants to report on their activities. This year’s poll was based on 12,150 responses covering forex transactions totalling $175.3 trillion.
Zar Amrolia, global head of forex at Deutsche Bank, said: “We’ve invested in our forex business consistently over many years and have been able to maintain our leading position as a result. It is a core banking activity that clients genuinely need. Forex is short-dated and highly liquid with a great return on economic capital and minimal balance sheet consumption.”