Citigroup Retains Currency-Trading Crown as Deutsche Bank Slides

  • JPMorgan is No. 2, UBS is No. 3 in Euromoney magazine survey
  • Trading volume falls 23 percent as big banks lose market share

Citigroup Inc. is the world’s largest currency trader by market share, according to a Euromoney Institutional Investor Plc survey, the third straight year the New York-based bank has led the rankings.

Citigroup took a 12.9 percent market share, followed by JPMorgan Chase & Co. and UBS Group AG. Deutsche Bank AG, which was second in the rankings last year, fell to fourth place, Euromoney said in a statement. Trading volume fell 23 percent from last year, and the top five banks’ share of the market plummeted to an all-time low.

"There have been unprecedented shifts in the overall rankings," Euromoney said. "The biggest change in the rankings this year is the decline of the combined market share of the top five global banks."

The latest result highlights that regulations and the intensifying competition from non-traditional liquidity providers are hurting trading revenue among banks. Banks are losing businesses to non-bank liquidity providers. XTX Markets, a London-based electronic market maker, ranked 9th in the survey in its debut.

Concern about the outlook for the U.S., Europe and China, as well as mixed policy signals from central bankers around the world, have contributed to what UBS Chief Executive Officer Sergio Ermotti called a “paralyzing volatility” that’s scared away clients and caused industry-wide trading revenue to tumble to the lowest since 2009.

Last year alone, Wall Street eliminated more than 20,000 jobs, with trading desks bearing the brunt of the cuts. The decline comes as the industry is already grappling with price-manipulation scandals that have prompted tighter regulation.

“Banks are retreating to a more modest, strategic version of their traditional FX markets operations,” according to a report this week from Aite Group, a consulting firm based in Boston. “Nonbank firms are partially filling in the foreign-exchange liquidity and foreign-exchange credit-line voids left by banks.”

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