JPMorgan, Goldman Beat European Banks in Pandemic Service Survey

JPMorgan Chase & Co. and other Wall Street firms topped a survey of European bond investors who rated the quality of banks’ service during the coronavirus crisis, outpacing the region’s homegrown lenders.

The biggest U.S. bank was followed by Goldman Sachs Group Inc.and Citigroup Inc. in the poll of 94 asset managers and hedge funds, which was conducted by Greenwich Associates at the end of April. Greenwich asked them “which dealers stood by you the best during the recent turbulent markets?”

For about one in five respondents, the answer was “none.” European lenders have struggled to find their footing in the decade since the financial crisis, with many announcing repeated rounds of cutbacks while Wall Street rivals become further entrenched as global giants. The investors told Greenwich that maintaining sales and trading contact during the pandemic -- as well as a bank’s willingness to stand by previously quoted prices for a security -- factored into their response.

“It’s a balance sheet, scale and electronification game now, and the bigger you are, the better you do,” Greenwich Associates’ Satnam Sohal, who conducted the survey, said in an interview. “At European banks, restructuring has been dragged out, while U.S. banks recapitalized and restructured much earlier, allowing them to invest in technology and increase scale.”

Greenwich Associates also surveyed perceptions of service across six sub-categories: pan-European credit and rates, as well as U.K.-only and Continent-only rankings. U.S. banks held the top rank in all six.

Trading securities has been a bright spot for global banks as the pandemic led to a spike in market volatility and surging provisions for bad loans. First-quarter revenue for the 12 biggest banks across fixed income, currencies and commodities reached the highest level since 2015, according to Coalition Development Ltd.

To contact the reporter on this story:
Viren Vaghela in London at vvaghela1@bloomberg.net

To contact the editors responsible for this story:
Ambereen Choudhury at achoudhury@bloomberg.net

Keith Campbell

© 2020 Bloomberg L.P. All rights reserved. Used with permission.