Trading revenue fell by more than 20% in 2023; fourth quarter showed nearly 12% drop

Trading revenue was down by $2 billion in 2023, or 20.4%, from the year before at banks and savings associations, the national bank regulator said Wednesday.

The Office of the Comptroller of the Currency (OCC) also said that trading revenue in the year’s fourth quarter was down as well, by $1.6 billion (or 11.8%) from the previous quarter.

Although nearly 1,185 banks hold derivatives, the agency said, four large banks hold nearly nine in 10 (87.4%) of the notational amount of derivatives. That number has remained static for several reporting periods.

The OCC also said in its bank trading report for the 2023 fourth quarter:

  • credit exposure from derivatives decreased compared with the third quarter of 2023. Net current credit exposure decreased $68 billion, or 22%, to $240 billion.
  • derivative notional amounts decreased by $11.7 trillion, or 5.7%, to $192.5 trillion.
  • derivative contracts remained concentrated in interest rate products, which totaled $136.3 trillion or 40.8% of total derivative notional amounts.

OCC Reports Fourth Quarter 2023 Bank Trading Revenue