Martin Hughes, banking analyst at the stockbroker Credit Lyonnais-Laing, calculates that most City firms will have seen their profits from foreign exchange, money market and bond trading soar in the first six months. In many cases the income could have doubled.
Firm figures are only just starting to become available, but Mr Hughes has been able to base his estimates on the evidence of the profits made by banks and securities firms in the second half of last year, which included Black Wednesday, and the announcement by Lloyds Bank that its foreign exchange dealing profits rose 60 per cent in the first half of this year.
Further evidence will be given by the results being announced by National Westminster Bank today and Barclays on Thursday. Both have large foreign exchange and bond dealing operations and Mr Hughes estimates that the two may have made as much as pounds 400m from these operations alone so far this year.
If the income from the merchant banks, foreign banks, securities firms and moneybrokers is added in, the profits made from dealing could be as high as pounds 3bn in just six months - twice what it was estimated to be in the same period last year.
With the turbulence in European currencies and further cuts in interest rates, profits look set to soar again in the second half.