Deutsche Bank Fends Off Citigroup as Top Currency Trader

Deutsche Bank AG held off Citigroup Inc. to keep its position as top foreign-exchange trader for an eighth-straight year in an annual survey by Euromoney Institutional Investor Plc, even as its market share slipped below 15 percent.

Citigroup leapfrogged Barclays Plc and UBS AG to become the second-biggest currency trader, Euromoney said in an e-mailed statement yesterday. Barclays slipped to third place and UBS to fourth, while HSBC Holdings Plc climbed into the top five.

“It’s an arms race,” said Kevin Rodgers, head of FX spot, e-trading and derivatives at Deutsche Bank in London. “The foreign exchange market for all our customers is just getting better, cheaper and faster each year. The exciting thing for us in 2012 is that all the technology that we built in previous years is being completely revamped. Virtually everything that has helped us win for the last eight years is being replaced and improved over the course of this year and early next year.”

The top five banks in the survey accounted for 55 percent of trading. Citigroup’s market share climbed to 12.26 percent from 8.86 percent last year, while Deutsche Bank’s slipped to 14.57 percent from 15.65 percent.

“Our goal is to be the top foreign-exchange provider in the market place, and we are trying to get there,” said Jeff Feig, global head of Group of 10 foreign exchange at Citigroup in London. “We are investing and growing our business. We focus on delivering useful innovative functionality and cool technology to our clients, and we expect to see our volumes grow even more in the future.”

‘Fundamentally Change’

The poll is drawn from a survey of end users in the foreign-exchange markets and based on 15,423 responses, representing $208.4 trillion of turnover, Euromoney said.

Currency trading is likely to have fallen considerably in early 2012, after reaching a record $5 trillion a day in September last year, the Bank for International Settlements said on March 12.

Deutsche Bank saw record currency trading volumes in the first quarter of 2012, even as profit margins declined, it said in a report April 26. The Frankfurt-based bank said it is planning to redesign its AutobahnFX platform to give clients greater flexibility and better pricing.

“The form competition will take, the way we interact with clients and the services we offer, will fundamentally change in the next two years,” said Zar Amrolia, global head of foreign exchange at Deutsche Bank. “Anyone who isn’t prepared for this will lose out.”

‘Major Risk Events’

Barclays stayed in the top three after increasing its market share to 10.95 percent from 10.76 percent last year.

“You need to be a large participant to meet your clients’ demands,” said Mike Bagguley, global head of foreign exchange at Barclays. “Last year was a year of major risk events in the currency market. You had the tsunami, two Bank of Japan interventions and a Swiss National Bank intervention. How you steered through those events with your clients pretty much defined your year.”

Deutsche Bank and Citigroup also topped the poll in the Asia region, excluding Japan, which surveyed 4,978 respondents. Citigroup increased its regional market share to 17.07 percent from 11.74 percent in the 2011 survey.

The Asia Pacific region accounted for 21.29 percent of the global currency market trading this year, up from 20.63 percent in 2011, Euromoney said. Trading in Western Europe slipped to 43.06 percent from 45.94 percent.

Goldman Sachs Group Inc. was ranked top for Group of 10 research, Euromoney said. HSBC was number one for emerging markets research, while Citi was first for technical analysis, quantitative and flow research.

Following is a table of Euromoney’s rankings for foreign-exchange market share (all products).

Bank                2012                     2011
               Rank      Share (%)      Rank      Share (%)
Deutsche Bank  1         14.57          1         15.65
Citigroup      2         12.26          4         8.86
Barclays       3         10.95          2         10.76
UBS            4         10.48          3         10.60
HSBC           5         6.72           6         6.27
JPMorgan       6         6.60           5         6.44
RBS            7         5.86           7         6.20
Credit Suisse  8         4.68           8         4.80
Morgan Stanley 9         3.52           10        3.65
Goldman Sachs  10        3.12           9         4.13
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