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After years in the doldrums, Europe’s investment banks had their day in the sun in 2020. Some of them seized it and some of them botched it.

For Barclays Plc traders, the pandemic-induced market volatility has delivered their “best year ever,” while three of France’s largest banks have been hit hard, highlighting the split in how investment banks in Europe have been able to ride the wildest trading year in a decade.

“2020 was genuinely a game of two halves, with huge fixed-income beats in the first half as equities languished and the French suffered with derivative losses, and then equities and banking fees staged a strong recovery in the second half,” said Jonathan Tyce, a senior European banking analyst at Bloomberg Intelligence. “Barclays had a great year.”

On Thursday, Barclays reported a fourth-quarter trading revenue that surpassed analyst estimates, helping to outpace larger Wall Street rivals with a 45 per cent increase in market income for the year. Revenue at the London-based bank’s key fixed-income trading division rose by 53 per cent to 5.1 billion pounds ($7.2 billion) last year, the largest reported since 2012. The smaller stocks-trading company rose by 31 per cent.

“We gained market share across almost all the asset classes,” Barclays Chief Executive Officer Jes Staley said in an interview with Bloomberg TV. “We’ve invested in our investment bank for the last five years and I think last year started to pay real dividends and allowed us to be profitable every quarter.”

Credit Suisse Group AG’s securities business also announced a mixed fourth quarter on Thursday. However, an increase in consultancy fees, as clients tapped emerging capital markets for cash, helped to increase total investment banking revenues by around a fifth year on year.

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Earlier this month, Deutsche Bank AG said that the increase in fixed-income trading helped lift the troubled Frankfurt-based lender to its first annual net profit since 2014. UBS Group AG’s investment bank has reported its highest results since 2012 with a trading income of 33 per cent.

These performances have strengthened the hands of executives like Staley, who have spent years calling for significant – and costly – investment banking operations to be maintained and competing against Wall Street’s largest firms.

In 2020, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, Citigroup Inc. and Bank of America Corp. reeled more than $100 billion in combined trading revenues for the first time since the 2012 European sovereign debt crisis.

Critics of European investment banking have pointed to its pitfalls, especially in France.

French banks BNP Paribas SA, Societe Generale SA and Natixis SA saw some EUR 2.5 billion ($3.02 billion) of combined profits from equity trading erased in 2020 as investors across the globe raced to gamble on gyrating financial markets by purchasing shares and derivatives.

Paris-based companies had adopted structured goods, a dynamic variation of stock markets that flared up when businesses started canceling their dividends early in the year. And although BNP balances losses with profits from fixed-income investment, Naxitis also suffered a downturn there.

Unrivaled success means that the investment banking discussion will continue, with the emphasis now on how trading units will do in 2021. Although many of Europe’s investment banking divisions thrived on volatile-driven business, the post-pandemic period could change that, Bloomberg Intelligence analyst Tyce said.

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“The pace of trading normalization and increasing competition from the U.S. could render it a distant memory very quickly,” he said.

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