Earnings season of the third quarter fiscal year 15(3QFY15) will come next week as one of the biggest investment banks, JPMorgan Chase & Co (NYSE: JPM) is going to release earnings on October 13, 2015 after market close.
There are many concerns and predictions about the third quarter earnings.The upcoming earnings results will be tough for Wall Street and investors because of the poor performance of FICC division (Fixed Income, Currencies and Commodities), which is a major profit driving factor for investment banks. According to Morgan Stanley (NYSE:MS) analyst , Huw Van Steenis, the revenue from FICC division at Morgan Stanley will decline 10%-25% due to less deals on the foreign exchange market. Morgan Stanley shows the steady decline of the FICC business from $157 billion in 2009 to $90 billion in 2015.
Not only Morgan Stanley, but also other major investment banks may witness the secondworst season in the last two years. Analysts on Bloomberg say Bank of America Corp. (NYSE: BAC) is probable to see a dip of 6% in the revenue of FICC division, and Goldman Sachs Group Inc. (NYSE:GS) might see a decline of 9%. Investors may see that a major revenue driver for investment banks is on life support again. Remember that until earnings reports are released, predictions are just predictions.