Thomson Reuters and Bloomberg face slowdown in growth

On the face of it, this year may look like a grim one for the firms that supply the world’s banks with financial data but the outlook may not be as bad as it seems, at least for those companies that have diversified their businesses.  

The big two data vendors, Thomson Reuters and Bloomberg, which between them account for more than half the market in the Americas, derive a large chunk of their revenues from terminals leased en masse by investment banks and asset managers.

Contracts for these terminals last one to three years, so the financial impact on their suppliers is not necessarily immediate in a downturn.  But with banks cutting tens of thousands of staff in recent months, it is only a matter of time before these contracts are up for cancellation.

The vendors are fairly flexible in these talks.  They do not want their largest clients to cancel multi-million dollar contracts and are wary of angering a firm that could be a lucrative customer again when the markets recover, which they inevitably will.

Thomson Reuters, the largest data supplier to financial services, will tomorrow report its results for last year, which will give a potentially crucial insight into the future of the sector.

Analysts expect the figures to stand up but they raise doubts about the group’s revenue growth for this and next year as its biggest earner, the markets division, comes under pressure.

A consensus of analysts’ …