Kehrer Finds September Hit On Bank Broker Dealers Less Than Expected
Bank broker/dealers came through the market instability that followed the Sept. 11 terrorist attacks much better than expected, says Kenneth Kehrer, head of the Princeton, N.J. research firm, Kenneth Kehrer Associates.
Kehrer reports the typical bank broker/dealer experienced a 20% decline in revenue during September but notes that many had expected much worse.
Similar findings were reported by the Bank Securities Association, Wayne, Penn.
In its September survey of banks, the BSA found that broker-dealer productivity held up well, considering that there was only one week of production before the impact of events on Sept. 11th, that markets were closed for a 2nd week and that securities prices for the remainder of the month were volatile.
The typical bank broker/dealer produced $154 in revenue per $1 million in bank retail deposits during September, one-third less than the high water mark set in March, reports the November edition of the Kehrer-Equitable Monthly Bank Investment Services Monitor.
“August had been a banner month for investment sales in banks, but the equity markets were reeling from dismal economic news in early September,” comments Michael Dibbert, managing director of the reports sponsor, Equitable Distributors, New York, which is the wholesale distribution company of AXA Financial, Inc.
“With September having three fewer business days than August and the fact that the markets were closed for four days following the Sept. 11 disaster, it was not unreasonable to expect that bank investment sales would be down 30% overall, even if the same daily activity had been maintained from August,” Dibbert says.