Bank trading revenue slumps in third quarter; flat from a year earlier

Bank trading revenue was down nearly 11%, or $900 million, in the third quarter from the previous quarter, the regulator of national banks said Wednesday.

The Office of the Comptroller of the Currency (OCC) said trading revenue of U.S. commercial banks and federal savings associations was $7.2 billion in the third quarter 2019, down 10.9% from the previous quarter. The OCC reported the results in its Quarterly Report on Bank Trading and Derivatives Activities.

The agency did note, however, that third-quarter 2019 trading revenue was 2% higher than that reported at the end of third-quarter 2018, when trading revenue was $7.1 billion.

In other areas, the OCC reported:

  • Four large banks held 87.2% of the total banking industry notional amount of derivatives;
  • More than 1,300 insured U.S. commercial banks and savings associations held derivatives at the end of the third quarter 2019;
  • Nearly three in four derivative contracts remained (73.1%) are concentrated in interest rate products.
  • The percentage of centrally cleared derivatives transactions increased quarter-over-quarter to 43% in the third quarter 2019.

OCC’s Quarterly Report on Bank Trading and Derivatives Activities: Third Quarter 2019

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