Federally chartered commercial banks, thrifts see 41% less trading revenue in 4Q, OCC reports

U.S. commercial banks and federal savings associations (FSAs) had $4.2 billion in trading revenue in the fourth quarter of 2018 – down $2.9 billion, or 41%, from the third-quarter total, the Office of the Comptroller of the Currency (OCC) said Friday.

Fourth-quarter 2018 trading revenue decreased 28.5% from the $5.8 billion reported for the fourth quarter of 2017, the OCC reported in its Quarterly Report on Bank Trading and Derivatives Activities.

The agency also reported:

  • While four large banks held 87.3% of the total banking industry notional amount of derivatives, a total of 1,307 insured U.S. commercial banks and savings associations held derivatives at the end of the fourth quarter 2018.
  • Derivative contracts remained concentrated in interest rate products, which totaled $128.2 trillion, or 72.7% of total derivative notional amounts. Derivative notional amounts decreased $30.6 billion, or 14.8%, to $176.4 trillion in the fourth quarter.
  • The percentage of centrally cleared derivatives transactions decreased quarter-over-quarter to 39.8% in the fourth quarter 2018.
  • Credit exposure from derivatives decreased in the fourth quarter of 2018 compared with the third quarter of 2018. Net current credit exposure (NCCE) decreased $16.0 billion, or 4.5%, to $341 billion.

OCC Reports Fourth Quarter 2018 Bank Trading Revenue

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