McKinsey Says Bond Dealer Shift Could Boost Profit 30%
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The world’s largest bond dealers could boost profit as much as 30 percent at their securities units by demanding clients pay for services they’re now getting for free, McKinsey & Co. said.
Banks’ trading desks should do a better job of calculating the cost of holding bonds they don’t think will rise in value when giving clients bids for securities, New York-based McKinsey said in a report today on the investment-banking and trading industry. Other examples of the strategy shift the consultant proposed include cutting off clients who aren’t profitable for the bank.