UBS, Deutsche Bank Are JPMorgan’s Favored Securities Firms
Nov. 25 (Bloomberg) — UBS AG and Deutsche Bank AG are the investment banks most preferred by JPMorgan Chase & Co. analysts as they see them best able to handle litigation charges growing out of regulatory investigations.
Equity analysts led by Kian Abouhossein estimate revenue from trading debt to be 8.2 percent higher for the fourth quarter compared with the same period a year earlier for eight banks they covered in a note to clients today. Revenue from trading stocks will fall 9.2 percent, they estimate.
“The IB revenue environment in the fourth quarter 2014 has been tricky so far in our view,” the analysts said. “We expect a slightly more seasonal trend.”
UBS, the world’s biggest wealth manager, has “material dividend payout potential” with a high capital ratio, a measure of financial strength, the analysts said. Both Zurich-based UBS and Frankfurt-based Deutsche Bank can digest large litigation expenses without seeing their capital levels fall too low.
Deutsche Bank was among about 30 lenders that escaped a fine from the British Financial Conduct Authority for currency rigging earlier this month. It will still have to overhaul its practices, along with the other banks. UBS was fined about $800 million by regulators in the U.S, U.K. and Switzerland.
To contact the reporter on this story: Jeffrey Vögeli in Zurich at jvogeli@bloomberg.net To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Steve Bailey, Jon Menon
