The 4Q’06 pre-tax
profits of $10.8 billion were 54.9% above the preceding quarter and 156.8%
above results in the same year-earlier period.
The increase in profits in 4Q’06 occurred while both quarterly gross
revenues and expenses hit record high levels.
The securities
industry’s performance in 2006 was led by exceptionally strong trading gains
and record underwriting revenue. Some
highlights include:
Trading gains rose to $12.1 billion in 4Q’06, a 10.3% increase from $11.0 billion in 3Q’06 and 106.4% from $5.9 billion in 4Q’05. For the year as a whole, securities firms reaped $43.0 billion in trading gains, 84.7% above 2005’s level of $23.3 billion.
Gains from investment accounts also had a strong quarter, recording gains of $1.9 billion, up 56.4% and 166.1% over $1.2 billion the previous quarter and $0.7 billion in the same year-earlier period, respectively, and reaching $5.5 billion for the year as a whole, up 93.9% over $2.9 billion in 2005.
Underwriting revenue of $7.4 billion in 4Q’06 was the highest 2006 quarterly total in that revenue line, 55.2% higher than $4.8 billion in the immediately preceding quarter and 33.5% above $5.5 billion in the same year-earlier period. For 2006 as a whole, underwriting revenue reached a record $23.6 billion, an increase of 18.2% over the prior year’s $20.0 billion.
Fund management operations also put in a steady performance, reflecting increasing net asset values of and net inflows into mutual funds during 4Q’06 and the year as a whole.
To access SIFMA’s
full report on 2006 securities industry financial results, please visit http://www.sifma.org/research/pdf/SecIndUpdate032707.pdf.
