Trading revenue, still dominated by four big banks, slipped in second quarter

Cumulative trading revenue was down 22.4% – $3.9 billion – in the second quarter compared with the first at banks and savings associations, the regulator of national banks said Thursday.

The Office of the Comptroller of the Currency (OCC) said that in its Quarterly Report on Bank Trading and Derivatives Activities for the second quarter of 2023, total trading revenue at banks and savings associations was $13.7 billion.

The agency also reported that four large banks continue to hold the vast majority – 87% – of the total banking industry notional amount of derivatives. There are 1,186 total banks that hold derivatives, the agency said.

Even though the second quarter revenue dipped, the agency said, it remains well above that reported a year before. The OCC said trading revenue was $3.3 billion (or 31.7%) more than in the second quarter of 2022.

The agency also reported:

  • Credit exposure from derivatives increased in the second quarter of 2023 compared with the first quarter of 2023. Net current credit exposure increased $27.0 billion, or 10.8%, to $273.0 billion.
  • Derivative notional amounts increased in the second quarter of 2023 by $4.3 trillion, or 2.0%, to $221.9 trillion.
  • Derivative contracts remained concentrated in interest rate products, which totaled $164.1 trillion or 73.9% of total derivative notional amounts.

OCC Reports Second Quarter 2023 Bank Trading Revenue