Global investment banks' local stockbroking arms remained under pressure in 2012, as the industry continued to battle low trading volumes and structural change.
With Macquarie Group set to report its full-year earnings on Friday, industry trends suggest there has been little respite in the weak conditions facing its broking arm, Macquarie Securities.
Deutsche Securities Australia posted its third straight loss in the year to December, while JP Morgan Securities made a profit of just $748,000, accounts filed with the corporate regulator show.
UBS Securities Australia bucked the trend with a 30 per cent rise in profits to $55.2 million, but its earnings remain well below those of two years earlier.
The results highlight the continuing strain on institutional broking houses, many of which have been aggressively cutting costs in response to lower trading volumes and narrowing margins.
While these structural shifts are taking a toll on Macquarie, analysts expect its broking arm to show signs of improvement when the group hands down its profits on Friday, thanks to more cost cutting.
Analysts expect the home-grown investment bank to report a rise in profits to about $820 million, helped by better market conditions, but the woes of its broking and investment banking arms are likely to be a key focus.
Deutsche Bank analyst James Freeman said these two divisions may have improved, but this is likely to mainly be the result of cost-cutting, rather than higher revenue.
"We expect cost-cutting to have delivered most of the improvement in these divisions over the last 12 months, with the top line remaining subdued," Mr Freeman said.
Among some of Macquarie's big rivals, last year's sharemarket rally appears to have done little to reignite profits.
In the year to December, Deutsche Securities Australia posted a $12.9 million loss after a $20.3 million loss in 2011. Net fees and commissions fell by a quarter, to $49.7 million, and operating costs were cut heavily.
JP Morgan Securities also showed a sharp decline, which squeezed profits to just $748,000, compared with $6.6 million a year earlier. Neither JPMorgan nor Deutsche Bank paid a dividend to their parent companies.
UBS, which was the dominant broker until it was displaced by Citi late last year, had a slight increase in revenue from fees, and a sharp fall in interest expenses.
Macquarie Securities made losses in the last three halves, despite moves to cut costs by shedding almost 300 staff.