Thu Nov 28 00:50:34 UTC 2024: ## Israeli Conflict Fuels Record Profits for Global Banks

**London, November 27, 2024** – Global investment banks are poised to rake in their highest trading revenue in five years, fueled by the ongoing volatility in Israeli bonds and currency stemming from the protracted Middle Eastern conflict. Data from Reuters reveals that banks are projected to generate $475 million in fixed-income, currencies, and commodities (FICC) trading revenue linked to Israel in 2024, exceeding 2023 figures by over 10%.

This surge in profit is directly attributed to the market fluctuations caused by the 14-month war and its impact on the Israeli shekel. JPMorgan Chase is expected to lead the pack, with an estimated $70 million in revenue from these trades. While a small portion of their overall trading income, the double-digit increase highlights a significant bright spot in an otherwise sluggish year for FICC trading. Vali Analytics predicts overall FICC income for the surveyed banks will show no growth in 2024.

The volatility, experts say, stems from a combination of factors including Israel’s controversial judicial reforms in 2023, which initially alarmed investors, and the subsequent conflicts in Gaza and Lebanon. These events have driven up inflation, hampered economic growth, and increased borrowing costs, creating opportunities for traders to profit from price swings. Although the shekel has recently strengthened against the dollar, the heightened volatility throughout the year has benefited banks.

While JPMorgan, Goldman Sachs, and Citigroup dominate the Israeli FICC market, the impact on European banks remains unclear. Some European firms have already scaled back ties to Israeli companies under pressure from activists and governments. The increased trading activity, while lucrative for banks, negatively impacts Israeli businesses exposed to imported inputs or exported goods.

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