In this sunburnt land of home loans, few think of our retail banks for their trading chops (the inverse of course being true of Macquarie).
Yet the markets arms of our Big Four banks are big business and due to grow faster this year on the crest of volatile markets, currency turmoil and increased volumes.
Take Commonwealth Bank's trading unit, which in last week’s update revealed it had generated over $1 billion of first half operating profit. That’s more than Santos and enough to rank it in the ASX 50 as a standalone unit.
Sure, it’s a small change relative to the bank’s loan book and business banking arm. But make no mistake — these significant business units are growing at a decent clip, and crucially at the same time margins are coming under pressure in some corners.
