The U.S. Securities Industry Association has raised its projection for 2003 pre-tax profits for New York Stock Exchange reporting broker-dealers from US$15 billion to US$20.6 billion. These dealers account for approximately three-quarters of all industry activity.
“The industry shows strength across the board,” said SIA senior vice president and chief economist Frank Fernandez. “We continue to see signs that revenue is increasing in areas that have previously been negative or flat.”
The SIA also says that if fourth quarter results come in as strongly as the first nine months have proved to be, 2003 industry profits could surpass the record $21 billion profits the industry earned in 2000.
These projected results represent a sharp increase from last year’s US$6.9 billion in profits, and SIA says that it signals an end to the three-year downturn for Wall Street firms.
SIA’s initial projections for 2004 are for profits of US$22 billion from gross revenues of US$172 billion. The 2003 results are based on projected annual gross revenue of US$161 billion. The projected 2003 profit would be the second-best year ever.
The SIA says that the industry remained profitable during the difficult years of 2001 and 2002, largely due to cost-cutting efforts outpacing the decline in revenues.