Rates markets vignettes Periodically, we compile series of snapshots on markets that have seen interesting developments in recent times. This note includes a selection of such high-level snapshots for Rates markets, with special emphasises on EMEA and Americas.

1. Theme
© Tricumen Limited 2015. All rights reserved.
1 / 6 SW / Agentha / 16 March 2015
Rates markets vignettes
Periodically, we compile series of snapshots on markets that have seen interesting developments in
recent times. This note includes a selection of such high-level snapshots for Rates markets, with
special emphasises on EMEA and Americas.
Regional themes
 Europe: TLTRO depressed trading activity in Europe. Swaps markets remains depressed though
client activity grew
 US: banks adjusting more proactively to Basel 3 pressured the exotics market
 Emerging markets: Brazil local markets are impacted by the elections and actions of the central
bank
Product growth areas in FY14
 Canada
 Spain (especially structured rates)
 US Term Repo grew versus compared to overnight repo
 Latin America
 APAC Repo
E-Trading
 E-trading market share growing from 15% to c.50%
 In June-14, Credit Suisse transferred c.25% of its electronic rates trading into Wake LLC.
 Blackrock and Tradeweb are collaborating to allow users of Aladdin, to manage, price and
execute orders in the rates cash and derivatives markets
 To date, none of the agency electronic credit trading platforms have attracted significant liquidity;
Goldman Sachs is reported to be pulling back from the business
Banks’ shifting strategic focus
Source: Tricumen analysis.
BAML BNPP Citi CS DBK GS HSBC JPM MS UBS
Flow Rates
EU Exit / Cut
USA Exit / Cut
APAC
Structured Rates
EU Exit / Cut Exit / Cut Exit / Cut
USA Exit / Cut Exit / Cut
APAC Exit / Cut Exit / Cut Exit / Cut

2. Theme
© Tricumen Limited 2015. All rights reserved.
2 / 6 SW / Agentha / 16 March 2015
Operating revenue dynamics (FY14/FY13)
Source: Tricumen analysis. Notes: (1) Tricumen product definitions apply throughout. (2) All y/y dynamics and standard
deviations are calculated on line-by-line basis. Positive values indicate outperformance relative to the peer group average; zeros
indicate N/M or an outlier.
Operating revenue client type (selected banks, US$, FY14)
Source: Tricumen analysis.
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
BAML
BARC
BNPP
Citi
CS
DBK
GSHSBC
JPM
MS
RBS
SG
UBS
Flow &STIR MM
Structured
EM Rates
Peer Group Avg
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
EMEA
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Flow
Structured
EmMkts
Bank 1 Bank 2 Bank 3 Bank 4 Bank 5 Bank 6 Bank 7 Bank 8 Bank 9 Bank 10 Avg
Banks / Insurers AM / HF Retail &HNWI Corps &Sovereigns
Americas

3. Theme
© Tricumen Limited 2015. All rights reserved.
3 / 6 SW / Agentha / 16 March 2015
P&L efficiency (All Rates, US$, FY13 & FY14)
Cost / income
Front Office comp / income
Source: Tricumen analysis. Notes: (1) Tricumen product definitions apply throughout. (2) Positive values indicate
outperformance relative to the peer group average; zeros indicate N/M or an outlier.
Productivity (All Rates, selected banks, US$, FY13 & FY14)
Operating revenue / Front Office headcount
Source: Tricumen analysis. Notes: (1) Tricumen product definitions apply throughout. (2) Operating revenue excludes ‘bad
bank’ units, one-offs and DVA/FVA/equivalent. (3) Positive values indicate outperformance relative to the peer group average;
zeros indicate N/M or an outlier.
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
BAML
BARC
BNPP
Citi
CS
DBK
GS
HSBC
JPM
MS
RBS
UBS
Americas
EMEA
Peer Group
Avg
FY13
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
BAML
BARC
BNPP
Citi
CS
DBK
GS
HSBC
JPM
MS
RBS
UBS
FY14
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
BAML
BARC
BNPP
Citi
CS
DBK
GS
HSBC
JPM
MS
RBS
UBS
Americas
EMEA
Peer Group
Avg
FY13
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
BAML
BARC
BNPP
Citi
CS
DBK
GS
HSBC
JPM
MS
RBS
UBS
FY14
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
BAML
BARC
Citi
CS
DBK
JPM
MS
UBS
Flow &
EmMkts
Structured
Peer Group
Avg
Americas
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
BAML
BARC
Citi
CS
DBK
JPM
MS
UBS
EMEA

4. Theme
© Tricumen Limited 2015. All rights reserved.
4 / 6 SW / Agentha / 16 March 2015
Operating revenue / Trading VaR (All Rates, US$, FY14 vs FY11)
Source: Tricumen analysis. Notes: (1) Tricumen product definitions apply throughout. (2) Operating revenue excludes ‘bad
bank’ units, one-offs and DVA/FVA/equivalent. Trading VaR is based represents period average and is normalised to 1-day,
99% confidence, 2-year historical data. (3) Positive values indicate outperformance relative to the peer group average; zeros
indicate N/M or an outlier.
Operating revenue / RWA (All Rates, US$, FY13 and FY14)
Source: Tricumen analysis. Notes: (1) Tricumen product definitions apply throughout. (2) Operating revenue excludes ‘bad
bank’ units, one-offs and DVA/FVA/equivalent. RWA normalised to Basel 3. (3) Positive values indicate outperformance relative
to the peer group average; zeros indicate N/M or an outlier.
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
BAML
BARC
BNPP
Citi
CS
DBK
GS
HSBC
JPM
MS
RBS
UBS
Americas
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
BAML
BARC
BNPP
Citi
CS
DBK
GS
HSBC
JPM
MS
RBS
UBS
EMEA
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
BAML
BARC
Citi
CS
DBKGS
JPM
MS
UBS
FY13
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
BAML
BARC
Citi
CS
DBKGS
JPM
MS
UBS
FY14

5. Theme
© Tricumen Limited 2015. All rights reserved.
5 / 6 SW / Agentha / 16 March 2015
Rates markets decision tree
Source: Tricumen analysis.
Low volatility remains
Market fragmentation
Banks exit due to
increased costs of
serving all regions
Survivors Benefit
No significant exits
Smart Order
Routing/Agency model
likely to become the
norm
Market remains more
unified
Capital constrained
banks
Run flow rates to
minimise loses & invest
in niches e.g. Structured
Solutions, Canada,
Australia
Balance sheet rich banks “Ride the storm”
Volatility grows
New Entrants e.g. WFC,
RBC
Capital constrained
banks lose out
No New Entrants Profitability Returns

6. Theme
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6 / 6 SW / Agentha / 16 March 2015
About Tricumen
Tricumen was founded in 2008. It quickly became a strong provider of diversified market intelligence
across the capital markets and has since expanded into transaction and corporate banking coverage.
Tricumen’s data has been used by many of the world’s leading investment banks as well as strategy
consulting firms, investment managers and ‘blue chip’ corporations.
Situated near Cambridge in the UK, Tricumen is almost exclusively staffed with senior individuals with
an extensive track record of either working for or analysing banks; and boasts what we believe is the
largest capital markets-focused research network of its peer group.
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