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Wall Street banks had their best money-making quarter in years. They are firing traders anyway

  • Investment banks generated $43.9 billion in first-quarter revenue, the highest since 2015, according to financial research firm Coalition.
  • That didn't stop banks from cutting 6,000 traders, salespeople and bankers as an industry contraction continues.
  • European firms bore the brunt of the losses, according to Coalition.
The silhouettes of pedestrians are seen passing in front of the New York Stock Exchange in New York.
Michael Nagle | Bloomberg | Getty Images
The silhouettes of pedestrians are seen passing in front of the New York Stock Exchange in New York.

Global investment banks reaped the most first-quarter revenue in three years, but that didn't stop the industry from firing traders as a years-long contraction continues, according to a report.

The world's 12 biggest banks generated $43.9 billion in revenue from trading stocks and bonds and advising on mergers and security issuance, according to financial research firm Coalition. That's 3.3 percent more than the year-earlier period as strong equities trading results offset declines in bond trading and investment banking, the firm said Thursday.

But the industry still eliminated 6,000 employees in the quarter, falling to 52,100 front-office jobs such as trading, sales and advisory. That's 13 percent fewer employees than in 2013.

Europe struggling

Nearly a decade after the financial crisis, the industry is still in contraction mode as a handful of U.S.-based winners — think J.P. Morgan Chase, Goldman Sachs and Morgan Stanley — take market share from beleaguered European rivals. German lender Deutsche Bank said Thursday it will eliminate 7,000 jobs, including a quarter of its equities trading personnel. Also hurting headcount is the continued migration of stock and bond trading to electronic platforms and away from human-to-human interaction.

European firms bore the brunt of the recent job cuts, according to Amrit Shahani, research director at Coalition. That's because American banks benefited disproportionately from the first quarter's 28 percent bump in overall stock trading revenue, he said.

"Most of the uptick is going to the American banks, with one or two exceptions,'' Shahani said. "The gap between the Americans and Europeans has widened.''

The five biggest U.S. banks claimed 62 percent of global revenues, while seven European firms shared the rest, according to Coalition's data. That gap was the widest since at least 2012, showing that European firms have been steadily losing ground.