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Amid volatile markets, the world’s big financial firms enjoyed strong revenues in their market-driven divisions in the first half — but rising credit provisions pose a challenge to profits, research suggests.

In a new report, DBRS Morningstar said that wealth management revenues at some of the world’s biggest firms — including UBS Group AG, Bank of America Corp., Morgan Stanley and Credit Suisse Group — proved resilient in the first half of 2020, highlighting the strength and diversity of these businesses in the face of the Covid-19 outbreak.

“Under the increasingly challenging and uncertain environment, global firms have been able to reinforce their franchises and increase lending volumes,” DBRS said.

The rating agency also noted that the firms’ wealth management divisions “recorded strong inflows of net new money and experienced strong growth of deposit balances.”

However, they also saw higher credit provisions in their wealth management divisions in both Q1 and Q2, DBRS reported.

In a separate report, Fitch Ratings said that credit risk costs jumped significantly due to the effects of the pandemic at the major European investment banks, causing profits to drop.

Fitch reported that higher credit costs drove a 42% decline in aggregate operating profit in the second quarter among the big European financial firms.

Some of the banks forecast that their elevated credit costs will subside in the second half, assuming a gradual economic recovery and avoiding another round of strict lockdowns, Fitch noted.

At the same time, debt and equity underwriting revenue is expected to soften after a record first half, Fitch said.

DBRS said that it expects wealth management revenues to “remain resilient” in the second half of 2020, “further benefiting from strong relationships with capital markets businesses.”

However, if market volatility resurfaces, revenues could be negatively impacted in the second half.

“The course of the pandemic and political events could affect client volumes and market volatility,” Fitch said.