Banks’ trading revenue down 38.9% in third quarter, OCC reports

U.S. commercial banks and savings associations reported total trading revenue of $9 billion in the third quarter, down $5.7 billion – or 38.9% – from the second quarter, the Office of the Comptroller of the Currency (OCC) said Wednesday.

But trading revenue was up $1.7 billion, or 23.5%, from the same time one year ago, the agecy reported.

The OCC said a total of 1,371 insured banks and thrifts held derivatives at the end of the third quarter, but four large banks held 87.3% of the total banking industry notional amount of derivatives. The industry’s derivative notional amounts decreased in the third quarter of 2020 by $992 billion, or 0.6%, to $178.6 trillion.

The OCC also reported that:

  • Credit exposure from derivatives decreased in the third quarter of 2020 compared with the second quarter of 2020. Industry net current credit exposure (NCCE) decreased $21 billion, or 4.1%, to $490 billion.
  • Derivative contracts remained concentrated in interest-rate products, which totaled $129.8 trillion, or 72.7% of total derivative notional amounts, the agency said.
  • The percentage of centrally cleared derivatives transactions decreased 38.9% from the second quarter to the third quarter 2020.

OCC Reports Third Quarter 2020 Bank Trading Revenue