Corporate Banking & Securities

For 2014, we anticipate that the investment banking industry will continue to face a challenging environment despite a more supportive macroeconomic backdrop. Industry challenges and opportunities will likely impact performance including the changing regulatory environment, ongoing shifts in the competitive landscape and gradual withdrawal of bank support for the global economy.

We expect global growth in 2014 to result in a reduction in central bank intervention compared to the elevated levels seen over the last few years. Core bond yields are anticipated to gradually increase in 2014, but in an orderly process that reflects the underlying economic recovery and more positive macro environment. Despite a rally in 2013, equity levels are expected to remain high supported by higher earnings, stronger business confidence amid lower economic uncertainty, and relatively low global cash and bond yields.

We aim to continue to consolidate our strengths in fixed income flow through ongoing platform integration and investments, while executing on our cost, capital and leverage targets. Geographically we will continue to streamline the business and ensure that resources are appropriately allocated to market opportunities and to maximize profitability and returns.

Corporate Banking & Securities


Target 2015


Post tax return on average active equity

Increasing to 15 %


Cost-income ratio

Less than 65 %


Pro forma CRR/CRD 4 framework fully-loaded RWA

Less than € 200 bn

In 2014 we should remain on track to deliver our 2015+ objectives. Our post tax return on average active equity should moderately increase in 2014. The cost-income ratio is expected to slightly increase in 2014 and we remain on course to achieve our target in 2015. The business is already operating below our pro forma CRR/CRD 4 framework fully-loaded RWA equivalent target of € 200 billion and this should continue during 2014. Ongoing execution of this strategy should ensure that we will remain on track to achieve our 2015+ aspirations.

However there remain a number of risks and uncertainties, including exposure of still fragile global macroeconomic growth to event risks, the potentially significant impact of regulatory changes, effects of balance sheet de-leveraging, outcome of litigation cases, and OpEx benefits not being fully realized or impacting our competitive position.

In Sales & Trading, we expect global fixed income revenues to slightly shrink in 2014 versus 2013 levels. Cash equities flow revenues may trend higher in the medium term as the global recovery takes hold. Both margins and volumes will remain sensitive to how policy makers retrench from their current economic interventions.

In Corporate Finance, we expect the 2014 fee pool to be comparable to 2013 levels. Both ECM and M&A fee pools are expected to increase in-line with growing corporate confidence on the sustainability of the global recovery and stronger equity markets. However, the increases in ECM and M&A are expected to be offset by lower fee pools in debt issuance, particularly by non-investment grade issuers given record levels of activity in 2013.

Despite the challenging market conditions seen in recent years, and the continued uncertain outlook, by re-affirming focus, scale and efficiency and consolidating on previous success, CB&S should be positioned to face the potential challenges and opportunities the future environment may present.