Dealer Rankings 2020-21: Remote controllers
**The results of the dealer rankings poll and the associated feature are protected under copyright laws. Reproduction of the feature and/or the poll results, for either internal or external distribution, is strictly prohibited without the prior written permission of Total Derivatives.**
For information on reprints of the rankings, and permission to reproduce the results in any form, please contact sunil.sharma@totalderivatives.com or call +44 (0)20 7779 8556.
Dealer Rankings 2020-21: Remote controllers
Market-makers faced unprecedented challenges over the last year. Covid-19, remote-trading, a 120bps Treasury rally and then the March panic, were followed by a steady climb in yields from August onwards, a change of US administration, global mass vaccination and green shoots of hope. Investment banks’ FICC revenues surged by 41% in FY20 according to consultancy Coalition Greenwich, but headcount in FICC fell by 1%, suggesting that dealers did a lot more business over the last year, with no-one extra manning the pumps. Interestingly, after traders weathered the turmoil of March 2020 (with a massive hand from the central banks), the feared risk management disasters arrived a year after the beginnings of the pandemic, and in equity derivatives rather than rates.
If market developments in the shape of rising rates, steeper curves and higher volatility led to active clients and a greater opportunity set for traders, regulatory progress was centred on the transition from LIBORs to RFRs. Dollar LIBOR may have had its life extended but SONIA is laying a path for other RFRs to follow with even non-linear sterling products soon to switch to the risk-free rate.
Counter-intuitively, although USD LIBOR is the rate with the delayed end-date, it’s the transition from EURIBOR to €STR that seems to be progressing most slowly. The ECB-convened Working Group on Euro Risk-Free Rates is only at the stage of assessing the feedback from consultations, and is still mulling how/whether to produce robust, forward-looking €STR term rates.
In contrast, the USD LIBOR market seems almost ready to accept its fate. When asked whether SOFR can take over from LIBOR in 2021, some respondents to the Dealer Rankings answered "yes" and “for sure.” But, for others, the likelihood of a “phased” transition this year made 2022 a more likely date for SOFR’s ascension - and perhaps only assuming a term rate is available. On the sceptical side of the fence, some respondents also felt that the delay in the final cessation of USD LIBOR to 2023 risked slowing adoption of SOFR by allowing “more prevarication”. Regulators, like referees, may need to be alert to time-wasting.
The results of the Dealer Rankings
JP Morgan continues to be the leading interest rate derivatives bank across markets, according to the latest Dealer Rankings, with yet another global first place in 2020-21. Still, positions shifted among the rest of top five. Notably, Citigroup climbed to global second place, Barclays slipped to third and BNP Paribas broke from the peloton to grab fourth, ahead of Bank of America in fifth. Goldman Sachs and Morgan Stanley both slipped out of the global top five but maintained high rankings in the markets for dollar swaps, interest rate options and structured MTN trading.
By currency, JP Morgan remained top for USD interest rate derivatives. It was followed by Citigroup in second place and Bank of America in third. JP Morgan also retained first place for EUR derivatives, but BNP Paribas leapt to second and Barclays retained third. Barclays saw its lead narrow in GBP derivatives but remained in first place ahead of NatWest Markets in second. JP Morgan rose to third in GBP derivatives and Goldman Sachs fell to fourth. Mitsubishi UFJ remained first in JPY derivatives, ahead of Mizuho.
Across rates products, JP Morgan stayed ahead of Barclays in global inflation, while Citigroup rose to third. JP Morgan kept its big lead in global options and Barclays remained second, but Deutsche Bank rose to third. Morgan Stanley kept first place for interest rate structured MTNs, with Goldman Sachs rising to second and JP Morgan slipping to third.
Looking by market and product, JP Morgan held the top slot for USD IRS trading for both the 2-10 year and 10-50 year buckets, ahead of Citigroup in second and Bank of America third. Interestingly, Citadel Securities made its first appearance in the rankings with a fourth place for USD 2-10 year IRS.
JP Morgan was also first in USD options, in front of Morgan Stanley in second and Bank of America in third. JP Morgan also took the top slot for USD inflation products ahead of Citigroup and Goldman Sachs. Dollar structured MTNs were led by Goldman Sachs followed by JP Morgan, with Morgan Stanley third and Bank of America fourth.
A new question for this year’s Rankings covered SOFR trading. JP Morgan grabbed the inaugural first place, followed by Bank of America in second, Citigroup in third and Goldman Sachs in fourth. Morgan Stanley was joint fifth with Wells Fargo.
In EUR IRS, BNP Paribas jumped to first place for 2-10 year and 10-50 year swaps, just pushing JP Morgan into second place for both sectors of the EUR curve. Barclays was third for EUR 2-10 year and Deutsche Bank was fourth. In 10-50y swaps the positions swapped and Deutsche Bank was third and Barclays fourth. Citigroup remained in fifth.
In EUR options trading, JP Morgan was first again while Barclays held second place. BNP Paribas rose to third and Deutsche Bank slipped to fourth.
JP Morgan rose to first place for EUR inflation, ahead of BNP Paribas and Barclays. Morgan Stanley retained first place for EUR structured MTNs from Goldman Sachs in second and JP Morgan in third.
JP Morgan stayed top for EUR/USD cross-currency basis for the fifth year in a row, followed by Citigroup and BNP Paribas in second and third place, respectively.
In GBP interest rate swaps, NatWest Markets remained top for 10-50 year swaps while Barclays retained first place in the 2-10 year bucket. Barclays was also first for both GBP options and inflation, while NatWest rose to second for options and Deutsche Bank was third. JP Morgan climbed to second for GBP inflation and NatWest Markets was placed third. Bank of America rose to fourth in GBP inflation and Goldman Sachs slipped to fifth.
Finally, JPY swaps and options saw Mitsubishi UFJ, Mizuho, Sumitomo Mitsui and Nomura fight for the top three places, with Mitsubishi UFJ placed first in both 2-10y and 10-50y, ahead of Nomura and Mizuho, respectively.
All interest rate derivatives
|
1. |
JP Morgan |
20.1% |
|
2. |
Citigroup |
9.3% |
|
3. |
Barclays |
8.9% |
|
4. |
BNP Paribas |
6.9% |
|
5. |
Bank of America |
6.9% |
USD 2-10y IRS
|
1. |
JP Morgan |
26.5% |
|
2. |
Citigroup |
17.2% |
|
3. |
Bank of America |
10.5% |
|
4. |
Citadel Securities |
7.4% |
|
5. |
Goldman Sachs |
6.5% |
USD 10-50y IRS
|
1. |
JP Morgan |
26.8% |
|
2. |
Citigroup |
14.9% |
|
3. |
Bank of America |
13.4% |
|
4. |
Morgan Stanley |
7.1% |
|
5. |
Goldman Sachs |
6.3% |
USD interest rate options
|
1. |
JP Morgan |
22.2% |
|
2. |
Morgan Stanley |
12.9% |
|
3. |
Bank of America |
11.2% |
|
4. |
Citigroup |
10.7% |
|
5. |
Goldman Sachs |
9.8% |
SOFR
|
1. |
JP Morgan |
31.1% |
|
2. |
Bank of America |
16.7% |
|
3. |
Citigroup |
15.4% |
|
4. |
Goldman Sachs |
7.1% |
|
5. |
Morgan Stanley |
4.5% |
|
5. |
Wells Fargo |
4.5% |
USD inflation derivatives and cash
|
1. |
JP Morgan |
25.1% |
|
2. |
Citigroup |
13.7% |
|
3. |
Goldman Sachs |
9.7% |
|
4. |
Barclays |
9.3% |
|
5. |
Bank of America |
8.8% |
USD interest rate structured notes
|
1. |
Goldman Sachs |
20.9% |
|
2. |
JP Morgan |
20.4% |
|
3. |
Morgan Stanley |
19.9% |
|
4. |
Bank of America |
10.7% |
|
5. |
Citigroup |
5.8% |
EUR 2-10y IRS
|
1. |
BNP Paribas |
19.7% |
|
2. |
JP Morgan |
17.2% |
|
3. |
Barclays |
8.7% |
|
4. |
Deutsche Bank |
8.5% |
|
5. |
Citigroup |
8.2% |
EUR 10-50y IRS
|
1. |
BNP Paribas |
19.7% |
|
2. |
JP Morgan |
18.5% |
|
2. |
Deutsche Bank |
9.6% |
|
4. |
Barclays |
9.3% |
|
5. |
Citigroup |
7.3% |
EUR interest rate options
|
1. |
JP Morgan |
24.4% |
|
2. |
Barclays |
13.8% |
|
3. |
BNP Paribas |
12.2% |
|
4. |
Deutsche Bank |
8.9% |
|
5. |
Citigroup |
6.1% |
EUR/USD cross-currency basis
|
1. |
JP Morgan |
27.5% |
|
2. |
Citigroup |
12.5% |
|
3. |
BNP Paribas |
11.7% |
|
4. |
Barclays |
8.8% |
|
5. |
Deutsche Bank |
5.8% |
EUR inflation cash and derivatives
|
1. |
JP Morgan |
17.7% |
|
2. |
BNP Paribas |
14.6% |
|
3. |
Barclays |
13.6% |
|
4. |
Deutsche Bank |
12.6% |
|
5. |
Citigroup |
8.1% |
EUR interest rate structured notes
|
1. |
Morgan Stanley |
19.4% |
|
2. |
Goldman Sachs |
13.9% |
|
2. |
JP Morgan |
12.7% |
|
4. |
BNP Paribas |
11.5% |
|
5. |
Credit Agricole |
10.3% |
JPY 2-10y IRS
|
1. |
Mitsubishi UFJ |
22.0% |
|
2. |
Nomura |
21.3% |
|
3. |
Mizuho |
18.0% |
|
4. |
JP Morgan |
10.7% |
|
5. |
Barclays |
9.3% |
JPY 10-50y IRS
|
1. |
Mitsubishi UFJ |
20.1% |
|
2. |
Mizuho |
18.8% |
|
3. |
Nomura |
18.1% |
|
4. |
JP Morgan |
12.5% |
|
5. |
Barclays |
6.9% |
JPY interest rate options
|
1. |
Mitsubishi UFJ |
21.1% |
|
2. |
Nomura |
17.5% |
|
3. |
Mizuho |
15.8% |
|
4. |
JP Morgan |
12.3% |
|
5. |
Sumitomo Mitsui |
5.3% |
|
5. |
BNP Paribas |
5.3% |
JPY inflation derivatives and cash
|
1. |
Nomura |
24.8% |
|
2. |
Mizuho |
17.1% |
|
3. |
Mitsubishi UFJ |
16.2% |
|
4. |
JP Morgan |
10.3% |
|
5. |
Sumitomo Mitsui |
6.0% |
|
5. |
Barclays |
6.0% |
GBP 2-10y IRS
|
1. |
Barclays |
29.9% |
|
2. |
NatWest Markets |
17.6% |
|
3. |
JP Morgan |
7.4% |
|
4. |
Bank of America |
4.9% |
|
4. |
Goldman Sachs |
4.9% |
|
4. |
Lloyds |
4.9% |
GBP 10-50y IRS
|
1. |
NatWest Markets |
25.3% |
|
2. |
Barclays |
22.0% |
|
3. |
JP Morgan |
10.8% |
|
4. |
Goldman Sachs |
5.9% |
|
5. |
Citigroup |
5.4% |
GBP interest rate options
|
1. |
Barclays |
31.1% |
|
2. |
NatWest Markets |
11.9% |
|
2. |
Deutsche Bank |
11.9% |
|
3. |
JP Morgan |
10.6% |
|
4. |
Goldman Sachs |
7.9% |
GBP inflation derivatives and cash
|
1. |
Barclays |
33.3% |
|
2. |
JP Morgan |
11.4% |
|
3. |
NatWest Markets |
10.6% |
|
4. |
Bank of America |
9.1% |
|
5. |
Goldman Sachs |
8.3% |
All USD interest rate derivatives
|
1. |
JP Morgan |
25.8% |
|
2. |
Citigroup |
13.8% |
|
3. |
Bank of America |
12.0% |
|
4. |
Goldman Sachs |
8.9% |
|
4. |
Morgan Stanley |
8.4% |
All EUR interest rate derivatives
|
1. |
JP Morgan |
19.8% |
|
2. |
BNP Paribas |
15.8% |
|
3. |
Barclays |
9.5% |
|
4. |
Deutsche Bank |
8.9% |
|
5. |
Citigroup |
7.7% |
All JPY interest rate derivatives
|
1. |
Nomura |
20.4% |
|
2. |
Mitsubishi UFJ |
20.0% |
|
3. |
Mizuho |
17.5% |
|
4. |
JP Morgan |
11.4% |
|
5. |
Barclays |
6.3% |
All GBP interest rate derivatives
|
1. |
Barclays |
28.7% |
|
2. |
NatWest Markets |
17.1% |
|
3. |
JP Morgan |
9.8% |
|
4. |
Goldman Sachs |
6.5% |
|
5. |
Deutsche Bank |
5.9% |
All IRS
|
1. |
JP Morgan |
19.3% |
|
2. |
Citigroup |
9.9% |
|
3. |
Barclays |
8.7% |
|
4. |
BNP Paribas |
7.8% |
|
5. |
Bank of America |
6.7% |
All interest rate options
|
1. |
JP Morgan |
19.5% |
|
2. |
Barclays |
10.1% |
|
3. |
Deutsche Bank |
7.8% |
|
4. |
Citigroup |
7.4% |
|
5. |
Goldman Sachs |
7.2% |
All inflation
|
1. |
JP Morgan |
17.7% |
|
2. |
Barclays |
14.7% |
|
3. |
Citigroup |
8.6% |
|
4. |
Nomura |
6.5% |
|
5. |
Goldman Sachs |
6.4% |
All interest rate structured notes
|
1. |
Morgan Stanley |
19.7% |
|
2. |
Goldman Sachs |
17.8% |
|
3. |
JP Morgan |
17.0% |
|
4. |
BNP Paribas |
6.5% |
|
5. |
Credit Agricole |
6.2% |
|
5. |
Bank of America |
6.2% |
The methodology
Total Derivatives’ rankings are the most comprehensive peer review of dealers’ performance in interest rate derivatives trading. There were around 800 individual responses to the latest rankings, registering a total of almost 2,400 votes. Experienced professionals involved in trading, sales and marketing, structuring and strategy at investment banks formed the largest group of respondents, with portfolio managers at asset managers and hedge funds also taking part. Voting took place in February and March 2021.
To recap, respondents were asked to rank the top three dealers (other than their own institution) based on reliability of market-making, keenness of pricing, depth of liquidity provision, speed of execution, access to e-trading platforms, efficiency of post-trade processing and product innovation.
Market-makers were ranked in dollars, euro, yen and sterling. Product categories include two year to 10-year interest rate swaps, 10-year to 50-year interest rate swaps, inflation (cash and derivatives), interest rate options, SOFR, EUR/USD cross-currency basis swaps and interest rate structured MTNs in USD and EUR.
For information on reprints of the rankings, and permission to reproduce the results in any form, please contact sunil.sharma@totalderivatives.com or call +44 (0)20 7779 8556.