Bond traders at JPMorgan Chase & Co. and Citigroup Inc. face the fastest-shrinking bonus pools on Wall Street this year, while Morgan Stanley investment bankers head for the greatest gains.

JPMorgan’s fixed-income trading revenue fell 14 percent to $10.6 billion in the first nine months of 2014, the steepest drop among the five largest Wall Street banks, according to data compiled by Bloomberg for the first half and analyst estimates for the third quarter. By contrast, Morgan Stanley probably had the biggest increase in revenue from advising on mergers and underwriting stock and bond deals, the estimates show.

Wall Street thoughts turn to bonuses this month as firms report third-quarter results, giving a sense of how they’ve done for most of the year and how much they will allot to bonus pools. While markets lulled by Federal Reserve intervention have crimped trading, investment bankers have fared better amid a surge in mergers and issuance of debt and stock.

“This will be a good year for investment bankers, and the largest banks have figured out a way to compensate their best individuals,” said Devin Ryan, a New York-based analyst at investment bank JMP Group Inc. In trading, “if returns are still challenged, and in 2014 they will be, that will impact where the compensation pools are for those businesses.”

Earnings Season

JPMorgan, Citigroup and San Francisco-based Wells Fargo & Co. kick off U.S. bank earnings season when they release results Oct. 14. Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley report later in the week.

The six banks probably will post $15.9 billion in combined third-quarter profit, a 19 percent increase from the previous year, according to the average of analysts’ estimates compiled by Bloomberg. That’s driven by a rebound at JPMorgan, which may post $5.34 billion in earnings compared with a $380 million loss a year earlier caused by $7.2 billion in litigation and regulatory costs.

While the companies don’t disclose pay pools for business lines such as fixed-income trading and advisory, compensation is largely determined by revenue. Declines and gains don’t reflect which firms will pay the biggest bonuses. Wells Fargo, whose securities business is much smaller, European banks and other advisory firms haven’t been included in the revenue comparisons.

Market Volatility

Market volatility increased in the final weeks of the quarter, sparked by a stronger U.S. dollar, concern that Scotland would secede from the U.K. and Bill Gross’s departure from Pacific Investment Management Co., manager of the world’s biggest bond fund. Volatility leads to increased trading as clients buy hedges or make bets against further moves.

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