Securities Industry Association: Securities Industry Continues Strong Growth - First Quarter Profits Rise, But Early Indications From Second Quarter Indicate Plateauing

While the securities industry posted strong gains in profits and revenues for first quarter 2004 compared to the previous quarter, indications are that the pace of growth has leveled off, according to the latest issue of the Securities Industry Association’s Research Reports. Profits rose 13.4 percent from the fourth quarter of 2003 to reach $7.58 billion, and gross revenues increased 6.8 percent to reach $58.68 billion from the fourth quarter’s $54.92 billion.

This represents a slowing of revenue growth, which expanded 7.6 percent from the third quarter of 2003 to the fourth. Expenses, however, continued their upward climb as firms began increasing their compensation budgets. While the fourth quarter’s expenses increased five percent above the third quarter’s, the first quarter 2004’s $51.09 billion represents a 5.9-percent increase from the fourth quarter’s $48.23 billion.

SIA Chief Economist Frank Fernandez, while expecting revenues and profits to plateau across the course of the year, predicts that full-year 2004 results will show significant gains over 2003. Total revenue for the year should reach $232.1 billion, a 9.1-percent increase, and profits are expected to reach $27.8 billion, a 15-percent increase.