(Bloomberg) -- Citadel Securities and Jane Street Group LLC, two of the largest market-making firms in the US, are on track for record annual revenue hauls as they further encroach on the big banks' trading territory.
First-half net trading revenue rose 81% to $4.9 billion from the same period a year earlier at Citadel Securities, and gained 78% to $8.4 billion at Jane Street, according to people familiar with the matter, both well ahead of the pace needed for an all-time high annual total.
The results offer a rare glimpse into the closely held firms, which have been investing in technology and talent to steadily expand their market-making capabilities in equities and fixed-income trading across the globe.
Jane Street has dominated the exchange traded-funds space while expanding to credit trading. Citadel Securities recently entered corporate-bond trading, starting with investment-grade bonds, and also started electronic trading of euro and sterling interest-rate swaps.
Jane Street, in an update to investors last week, said its recent growth was driven by continued elevated equity and options volume as well as strong inflows into exchange-traded funds.
The firm sold a $1.4 billion high-yield bond deal earlier this year to expand cash on its balance sheet, which allowed it to continue to invest in the business, the people said, asking not to be identified discussing non-public information.
Ken Griffin's Citadel Securities generated $2.7 billion of adjusted earnings in the first half, up from $1.1 billion a year earlier, the people said. The second quarter contributed $2.6 billion of net trading revenue and $1.4 billion of adjusted earnings, they said.
First-half adjusted earnings at Jane Street were around $6.1 billion, nearly double the 3.1 billion of a year earlier. About $2.9 billion of this year's total came in the second quarter, when the firm had $4 billion of net trading revenue.
A representative for Citadel Securities declined to comment, and Jane Street didn't immediately provide a comment.
The figures are among a raft of financial markers recently disclosed to debt investors that lend to the two companies.
By comparison, Wall Street's biggest banks saw an 18% jump in combined revenue in equities trading, according to their second-quarter results, more than triple the increase analysts estimated.
Citadel Securities ended the quarter with about $3.9 billion of unrestricted cash and $15.3 billion of net trading capital. Jane Street had about $5.7 billion of cash on its balance sheet.
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