The $5 billion in fourth-quarter 2017 trading revenue reported for U.S. commercial banks and federal savings associations is down $1.4 billion, or 21.2%, from the previous quarter, the Office of the Comptroller of the Currency (OCC) reported Friday.
Year over year, fourth-quarter trading revenue declined $1 billion, or 16.1%, from the $6 billion recorded in the fourth quarter of 2016.
The quarter-over-quarter and year-over-year decrease in trading revenue was primarily due to declines in credit, interest rate, and foreign exchange (FX) trading revenue, according to the OCC’s Quarterly Report on Bank Trading and Derivatives Activities.
The OCC also reported:
- Trading risk, as measured by value-at-risk (VaR), increased in the fourth quarter 2017. Total average VaR across the top five dealer banking companies increased $2 million from the previous quarter, or 0.8%, to $258 million.
- The percentage of centrally cleared derivatives transactions decreased to 38% in the fourth quarter of 2017, down from 38.8% in the fourth quarter of 2016.
- While the largest four banks held 89.4% of the total banking industry notional amount of derivatives, 1,364 U.S. commercial banks and savings associations held derivatives at the end of the fourth quarter of 2017.