Banks’ $8.1B in Q2 trading revenue lags previous quarter, year

U.S. commercial banks and savings associations reported $8.1 billion in trading revenue for the second quarter of 2021, down $2.4 billion, or 22.9%, from the first quarter and down $5.6 billion, or 40.9%, from a year earlier, the institutions’ federal regulator said.

A total of 1,372 insured U.S. national and state commercial banks and savings associations reported trading and derivatives activities at the end of the second quarter of 2021, the Office of the Comptroller of the Currency (OCC) said in its report Thursday. As in previous reports, it noted that a small group of large financial institutions continues to dominate trading and derivatives activity in the U.S. commercial banking system. “During the second quarter, four large commercial banks represented 88.7% of the total banking industry notional amounts and 77.8% of industry net current credit exposure (NCCE),” it said in the Q2 report.

Additionally, it said:

  • derivative notional amounts decreased in the second quarter of 2021 by $5.5 trillion, or 2.9%, to $183.5 trillion;
  • derivative contracts remained concentrated in interest rate products, which totaled $133.3 trillion, or 72.6%, of total derivative notional amounts; and
  • the percentage of centrally cleared derivatives transactions increased quarter-over-quarter to 39.5% in second quarter 2021.

OCC Reports Second Quarter 2021 Bank Trading Revenue