Bank trading revenue down 7% in first quarter, OCC reports

Trading revenue for U.S. commercial banks and federal savings associations declined in the first quarter of the year, totaling $6.7 billion. That’s down $505 million, or 7%, from the fourth quarter of 2019, the Office of the Comptroller of the Currency (OCC) reported.

Year over year, trading revenue was down 33.4%, declining from first-quarter 2019 trading revenue of $10 billion, according to the OCC’s Quarterly Report on Bank Trading and Derivatives Activities, released Friday.

The report also showed:

  • While four large banks held 86.7% of the total banking industry notional amount of derivatives, a total of 1,360 insured U.S. commercial banks and savings associations held derivatives at the end of the first quarter 2020.
  • The percentage of centrally cleared derivatives transactions increased quarter-over-quarter to 42.3% in the first quarter 2020.
  • Credit exposure from derivatives increased in the first quarter of 2020 compared with the fourth quarter of 2019. Net current credit exposure (NCCE) increased $227.0 billion, or 61.7%, to $594.0 billion.
  • Derivative notional amounts increased in the first quarter of 2020 by $26.0 trillion, or 15.2%, to $197.5 trillion.
  • Derivative contracts remained concentrated in interest-rate products, which totaled $146.0 trillion or 73.9% of total derivative notional amounts.

OCC Reports First Quarter 2020 Bank Trading Revenue