Wall Street’s once lucrative fixed income divisions are braced for the worst start to the year since before the financial crisis with revenue declines of up to 25 per cent, prompting banks to plan more redundancies on top of the tens of thousands of job cuts already made.

Citigroup and JPMorgan Chase have warned publicly that fixed income revenues – the engine of most investment banks’ profits since 2000 – will be down by double digits when they report first-quarter earnings next month. Other banks privately warn that their year-on-year declines could exceed 25 per cent after institutional investors and banks shied away from trading. The first quarter is traditionally a high point for revenues.

The top 10 banks are expected to make a combined $24.8bn of revenues in fixed income -trading, which includes bonds, currencies and commodities, according to Morgan Stanley and Credit Suisse estimates. That is more than 40 per cent below the first quarter of 2009 when the market rebounded sharply from the crisis.