Investment Banking | Focus KBW 's Could Lead To A Number Of Slums Investment Banking Revenue

KBW KBW reported a net loss of $ 4.2 million, or $ 0.14 per share, $ 64 million of revenue for the second quarter of 2011. Revenues decreased by a spectacular 33% sequentially, primarily from income 60% less than investment banking. Other sources of income rose with dignity and accounted for only 9% of the revenue decline 33% sequentially. Although second quarter results were lower than expected, they don 't plan to make a major change in the estimated fair value, as our long-term outlook remains unchanged.

Excluding amortization of structured securities, which reduced principal transactions revenues during the recession, KBW reported its lowest level of income from a public company in the most recent quarter. A key difference between KBW and its fellow investment banking is its focus on financial institutions. For most investment banks, underwriting income was subjected to during the recession, but began to increase as the economy recovered. For KBW 's, income from investment banking is still very healthy during the recession, as many banks need to raise capital to repair their balance sheets. With many U.S. banks standing firm, no longer have an urgent need to improve their capital base. Moreover, as the U.S. economy is subject, many financial institutions don 't see the need to raise capital for expansion. Next quarter, revenues from investment banking could recover something, it would be difficult to find in the bottom of the second quarter sad. However, until the economy recovers and financial institutions are optimistic about the expansion or regulations to promote the consolidation, they don 't anticipate sustained growth in KBW' s investment banking revenue.

Although we believe that investment banking may remain moderate in the short term, a healthy level of fees could provide some stability of income they need. For the most part, we believe institutional brokerage operations is one of the least attractive of an investment bank. That said, the expansion of KBW 's in Europe and Asia, leads us to believe that fee income can be a major growth factor for the company in the future of investment banking revenues.

In anticipation of revenue growth slowed, the administration has decided to review its costs. Many investment banks have also recently announced the cost-saving initiatives, so it 's more a factor of a grim picture of the industry problems of KBW. One bright spot for children KBW regarding the discipline of management expenses is that outside the neighborhoods where the company has experienced significant losses in principal transactions, compensation has varied with income and has generally been the range of 58% to 65%.