Barclays & Bank of America might benefit from fewer fixed income traders

2024 isn't working out to be the best year for fixed income sales and trading. Last week's 2024 bonus predictions from Johnson Associates said fixed income bonuses should be up 5-10% on 2023, which is better than down but worse than the 20%-30% increase that Johnson's predicting for equities bonuses.

In the circumstances, fixed income trading teams might want to drop a few people. Data from market intelligence provider Tricumen suggests which teams might benefit most. 

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Based on its own revenue and headcount estimates, Tricumen says revenues per head are particularly low for fixed income, currencies, and commodities (FICC) teams at Bank of America and Barclays. 

Operating revenue per Front-Office Full Time Employee in FICC teams by bank in H1 of 2024

Source: Tricumen

Tricumen’s data shows operating revenue per front-office full-time employee measured against the peer-group average. The dotted circle represents the average, while the red dots reflect the relative performance of the labelled bank, measured in standard deviations from the peer-group average.

Bank of America managed to grow revenue by 3% in the second quarter of this year compared to last, which was better than some rivals. The bank extolled credit traders for the increase, and blamed the offset on a “weaker trading environment” in macro products (foreign exchange and interest rates).

Barclays’ poor performance is more easily explained, however. The bank is skewed towards macro trading, which suffered particularly in the first half of 2024 – the bank’s Q2 results lay the falling revenue on “lower client activity in macro” specifically, as well as the lack of repeat for the “inflation benefit” from last year. 

Both banks have been altering headcount in their fixed income teams. Between mid-2021 and mid-2023, Bank of America doubled its currencies & commodities team offering for corporate clients and increased headcount in EMEA sales & trading by 50%. Most of the hiring this year, however, seems to be in equities.

Barclays has also been adding to its macro team after CEO C.S. Venkatakrishnan said that the bank was "supplementing the skills that we have on the trading desk." It's cutting jobs at the moment, but that hasn't stopped it from adding traders, including Ben Hutson and Liam Webster.

Tricumen said the highest revenues per head were generated by fixed income traders at Goldman Sachs and JPMorgan. Deutsche Bank was surprisingly strong, especially given the marginal fall in FICC revenue that the bank saw in the second quarter of the year.

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