Bank trading revenue down 3.4% in third quarter

Commercial banks and savings associations reported a cumulative $13.2 billion in third-quarter trading revenue, down 3.4%, or $470 million, from the second quarter but up 3.7%, or $474 million, from the third quarter of 2022, the national bank regulator said Wednesday.

The Office of the Comptroller of the Currency (OCC), in its Quarterly Report on Bank Trading and Derivatives Activities, also said four large banks held 87.8% of the total banking industry notional amount of derivatives; that’s up from 87% in the second quarter.

In other data, the OCC said:

  • credit exposure from derivatives increased in the third quarter of 2023 compared with the second quarter of 2023; net current credit exposure increased $35.0 billion, or 12.9%, to $308.0 billion.
  • derivative notional amounts decreased in the third quarter of 2023 by $17.7 trillion, or 8.0%, to $204.2 trillion.
  • derivative contracts remained concentrated in interest rate products, which totaled $145.8 trillion or 71.4 percent of total derivative notional amounts.

A total of 1,185 insured national and state commercial banks and savings associations held derivatives in the third quarter.

OCC Reports Third Quarter 2023 Bank Trading Revenue