A record-breaking year for prime brokerage revenues, forecast to exceed $30.8bn in 2025, is sparking a push by European banks to claim a bigger share of the booming market – despite recent high-profile blowups and rising regulatory scrutiny, according to a report by Bloomberg.
Leading the charge is BNP Paribas, which is investing heavily in technology and talent to scale its global prime services platform. The French bank now boasts over $500bn in prime balances and aims to add another $40bn by year-end. A new platform, PBX+, is being built by an in-house team of 500 software engineers to simplify margin calculations across asset classes, a move BNP says could reduce margin requirements by as much as 30% compared to rivals.
BNP’s momentum stems in part from its post-Archegos acquisition of Credit Suisse’s hedge fund clients, a deal that turbocharged growth in the wake of the Swiss bank’s collapse. BNP is now pushing into new areas such as corporate debt financing, bond repo, and cross-asset margining, hoping to hit $700bn in balances over the medium term.
Switzerland’s UBS Group AG is also looking to expand its prime brokerage operations and in the past two years, has added nine executive in the US focused on the business. Their focus is on everything from sales to consultancy services with hedge funds. According to the bank’s annual report, the division made $2.3bn in 2024, up 16% on the previous year.
But with this explosive growth comes increased scrutiny. European regulators have flagged concerns over hedge funds running highly leveraged positions — up to 18x, according to ESMA — and the entrance of smaller, under-resourced primes. The Bank of England is now probing risk oversight and KYC controls across the sector.
