[LONDON] European banks Deutsche Bank, Barclays and UBS have seen their market share in foreign exchange trading slump in the past year, as US banks led by Citigroup grabbed business, according to widely watched industry rankings.
Citigroup kept its top spot as the leading foreign exchange trading bank with a market share of 16.1 per cent, up from 16 per cent a year ago, according to the Euromoney FX Survey 2015.
Deutsche Bank and Barclays remained in second and third spots, but their market shares fell to 14.5 per cent from 15.7 per cent and to 8.1 per cent from 10.9 per cent, respectively.
UBS fell to fifth from fourth as its market share slumped to 7.3 per cent from 10.9 per cent, and HSBC dropped to seventh from fifth with a market share of 5.4 per cent from 7.1 per cent a year ago.
US banks made strong gains on their European rivals.
JPMorgan moved to fourth as its market share rose to 7.7 per cent from 5.6 per cent and Bank of America Merrill Lynch rose to sixth with a 6.2 per cent share, up from 4.4 per cent.
Euromoney, whose annual poll of liquidity consumption is watched closely by the foreign exchange (FX) industry, said a majority of business was conducted electronically for the first time in the past year, with e-channel execution accounting for 53.2 per cent of total volumes, up from 47 per cent in 2014 and 40 per cent in 2011.
The shift to electronic trading is adding to change across the industry, as banks come under pressure to change business models to focus on areas of strength and cut back where they lack scale.
Two years of scandal over market manipulation and the fallout of a 30 per cent move in minutes by the Swiss franc in January have led many banks to reassess their FX operations, traditionally among their biggest and most reliable earners.
One of the previous leaders, Royal Bank of Scotland, has fallen away and other European banks, striving to find new business models in response to a raft of new regulation and generally tighter margins on FX trading, have slashed staffing on trading floors.
The industry was rocked last year by allegations of market rigging, and authorities in the United States and Europe have fined seven banks over US$10 billion for failing to stop traders from trying to manipulate rates.