Banks’ trading revenue up $8 billion in Q2, totaling $14.7 billion, OCC reports

U.S. commercial banks and federal savings associations had $14.7 billion in trading revenue in the second quarter, up $8 billion, or 119.3%, from the first quarter and 81.5% more than the $8.1 billion reported in the second quarter of 2019, the Office of the Comptroller of the Currency (OCC) said Wednesday.

A total of 1,733 federally insured banks and savings associations held derivatives at the end of the second quarter, the agency said. The report shows:

  • Four large banks held 86.7% of the total banking industry notional amount of derivatives and 77.1% of industry net current credit exposure (NCCE).
  • NCCE for all insured institutions decreased by $83.4 billion (14%) to $511 billion in the second quarter.
  • Derivative contracts remained concentrated in interest rate products, which represented 73.5% of total derivative notional amounts.
  • The percentage of centrally cleared derivatives transactions decreased quarter over quarter to 40.3%.
  • Credit exposure from derivatives decreased $83.4 billion, or 14%, to $511 billion quarter over quarter.
  • Derivative notional amounts decreased in the second quarter by $17.9 trillion, or 9.1%, to $179.6 trillion.

OCC Reports Second Quarter 2020 Bank Trading Revenue