Deutsche Bank, BNP Show Europe Can Out-Do Wall Street Desks
(Bloomberg) — BNP Paribas SA and Deutsche Bank AG are showing banks don’t have to be on Wall Street to beat the competition.
The French bank became the second large European lender to outperform US stock traders in the third quarter with a 50% jump in equities revenue, after Barclays Plc did the same last week.
Both Deutsche Bank and BNP reported shallower declines across fixed income than their American peers, in a quarter marked by credit jitters, soaring yields on government bonds and rising rates, all of which crimped client demand for debt securities.
European investment banks have long been punished by investors for failing to live up to trading revenue reported by their Wall Street rivals. But for BNP, Barclays, Deutsche Bank and UBS Group AG, they’re taking advantage of the same trends and most are seeing success.
This quarter, banks across Europe and Wall Street were affected by the same market forces: Equities desks outperformed fixed income arms, driven by soaring demand from hedge funds to borrow capital to place stock bets in volatile markets.
BNP Paribas’s equities arm came out with the strongest growth story in Europe, reporting €1.46 billion ($1.62 billion) of revenue, which Jefferies analysts called a “stellar” performance.
“It’s really a tribute to the equities set up we’ve been building over the last couple of years,” BNP Chief Financial Officer Lars Machenil said in an interview with Bloomberg Television on Wednesday.
Barclays’ equities traders pulled equal with their fixed income colleagues for the first time in the third quarter. Their 47% jump in revenue also beat the 43% average across Wall Street. As with BNP, the London-based lender cited growth across its prime brokerage that caters to hedge funds, particularly in Asia.
At BNP, equities services, derivatives and prime brokerage all sit under one umbrella intentionally to help cross-sell different products to clients, Machenil said.
UBS couldn’t avoid a question of why its 22% jump in stock trading revenue failed to meet Wall Street averages, with Kepler Cheuvreux’s Nicolas Payen asking CFO Todd Tuckner on an earnings call Wednesday whether geographies or products “could explain the gap.”
Tuckner said the bank was “pleased” with the performance across the investment bank. Growth within equities stemmed from “higher client balances in prime brokerage,” the Swiss bank said in a statement.
Investors will on Thursday be watching Societe Generale SA, for which analysts are expecting a drop in revenue from fixed income and currencies and a marginal rise in equities income. The French bank has a smaller markets presence than its peers.
The boom in equities during the past few months is helping some banks counterbalance their less profitable fixed income desks. That left firms without an equities presence, including Deutsche Bank, at a disadvantage in terms of overall markets revenue.
Still, Deutsche Bank traders managed to outperform Wall Street, reporting a 3% fall in the third quarter. Major US banks on average saw a 5% decline in fixed income based on dollar-reported revenues.
Deutsche Bank CFO Raja Akram said in an interview with Bloomberg Television that the bank wants to keep building out its fixed income business, including credit trading and metals. That would help diversify revenues within the unit.
Fixed-income trading desks were crimped by rising interest rates, which can push down the value of existing debt and stifle demand from clients to transact. The Federal Reserve raised its benchmark rate in September to contain inflation, and 10-year Treasury yields approached the highest level in almost a quarter century earlier this month.
For the European banks, government debt on their own continent has struggled. Yields hit multidecade highs during the quarter as conflict in the Middle East dragged on and investors increasingly priced in fiscal and inflation risks.
Looking forward, Deutsche Bank’s Akram is hopeful that fixed income will pick up.
“On balance, we’ve had a pretty good start to the quarter,” the CFO said. “If credit recovers a little bit, we could actually end up being a pretty good quarter.”
–With assistance from Nicholas Comfort.
(Updates with SocGen estimates in 12th paragraph.)
©2026 Bloomberg L.P.
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