Trading revenue up 62.8% in 1Q at U.S. banks, savings associations; credit exposure, trading risk rise

Trading revenue of U.S. banks and federal savings associations totaled $8.2 billion in the first quarter, exceeding fourth-quarter 2017 trading revenue by $3.2 billion, or 62.8%, the Office of the Comptroller of the Currency (OCC) said Thursday.

Year over year, first-quarter 2018 trading revenue was up $1.1 billion, or 15%, the OCC reported.

The data are provided in the OCC’s first-quarter report on bank trading and derivatives activities. The report also showed:

  • Credit exposure from derivatives increased in the first quarter of 2018 as compared to the fourth quarter of 2017. Net current credit exposure (NCCE) increased $34.3 billion, or 10.2%, to $371.4 billion.
  • Trading risk, as measured by daily value-at-risk (VaR), increased in the first quarter of 2018. Total VaR2 across the top five dealer banking companies increased $49 million, or 18.8%, to $309 million.
  • Derivative notional amounts increased in the first quarter of 2018 by $31.8 trillion, or 18.5%, to $203.8 trillion.
  • Derivative contracts remained concentrated in interest rate products, which represented 76.3% of total derivative notional amounts.

OCC’s Quarterly Report on Bank Trading and Derivatives Activities: First Quarter 2018