The U.S. Securities Industry Association says that the U.S. industry will likely post a US$1 billion loss for the fourth quarter of 2002.
Based on preliminary fourth-quarter results, the SIA says that anticipated write-offs resulting from the global settlement agreement in principle and the threat of additional litigation, firms are expected to post a pre-tax loss of US$1 billion in the fourth quarter 2002. Before the settlements, it likely would have managed a US$1.2 billion profit.
This result will lower the total 2002 profits to US$4.8 billion, the lowest annual result in eight years. But, even without the global settlements, the SIA says that 2002 would have been the industry’s worst year in the last eight.
Gross and net revenue in the fourth quarter fell to five- and four-year lows, respectively. This pushes revenues to half of their record levels, reached a couple of years ago. Revenue declines came in almost every business line, including commissions, trading, investments, asset management, mutual fund sales and interest revenue. Only underwriting revenue rose, and it was just up 2% from a four-year low in the previous quarter.
Also, industry employment ended the year at 707,600, down from 733,000 at year-end 2001 and the lowest since October 1999.
SIA forecasts US$1billion loss for fourth quarter
U.S. securities industry revenues hit five year lows
- By: IE Staff
- February 7, 2003 February 7, 2003
- 16:50