Banks with extensive capital markets operations are expected to cut costs further and concentrate on niche services, says a recent Fitch Ratings report.
Last week, Reuters said the Q3 2012 reporting season came to a close for large global trading and universal banks, and performance has been mixed. Although earnings were slightly improved over Q2, Eurozone and fiscal cliff concerns continue to depress customer volumes.
And as revenue prospects are proving increasingly difficult to predict in a world of ever-changing regulation, banks are focusing more on service areas where they have competitive advantage.
Read more on how investment banks are stepping back from risk and paring their business models.
U.S. banks: smaller and restrained (Jan 2012)