A forecast from the trade association of the U.S. securities industry says Wall Street will earn record profits in 2003.

The Securities Industry Association says improvement continued in the third quarter of 2003 — after a strong first half — as revenue growth became more broadly based and profits jumped.

Profits for New York Stock Exchange reporting firms for 2003 are expected to reach US$22.45 billion, more than triple last year’s US$6.9 billion, and higher than the previous record of US$21.0 billion in 2000. This has allowed for a modest resumption of hiring and a rise in industry compensation, after sharp cuts in both areas in 2001 and 2002.

Revenues for 2003 are expected to reach US$153.7 billion, up 3.4% from 2002’s US$148.7 billion, but down from 2000’s record US$245 billion.

“The industry managed to maintain profitability, albeit at sharply reduced levels in 2001 and 2002, through sharp cuts in expenses that outpaced the plunge in revenues from record levels reached in 2000, ” said SIA senior vice president and chief economist Frank Fernandez.

Revenues from principal transactions (trading and investment gains) are expected to reach US$30.5 billion, and underwriting revenue is expected to increase from US$13.2 billion to US$16.7 billion.