OCC Reports First Quarter 2017 Bank Trading Revenue Increased to $7.1 Billion

WASHINGTON—Trading revenue of U.S. commercial banks and savings associations increased to $7.1 billion in the first quarter 2017, $1.5 billion, or 26 percent, higher than the first quarter a year earlier, according to a report released today by the Office of the Comptroller of the Currency (OCC).

In the report, Quarterly Report on Bank Trading and Derivatives Activities, the OCC also noted that trading revenue in the first quarter 2017 grew 18 percent compared with the $6 billion reported in the fourth quarter 2016. While there seems to be a seasonality to the revenue increase in the first quarter 2017, the largest driver of the year-over-year increase in trading revenue was interest rate and foreign exchange trading.

The OCC also reported:

• Trading risk, as measured by value-at-risk (VaR), increased in the first quarter 2017. Total average VaR across the top five dealer banking companies increased $10 million from the previous quarter, or 3.7 percent, to $277 million.
• The percentage of centrally cleared derivatives transactions increased to 39.2 percent in the first quarter 2017, up from 36.5 percent in the first quarter 2016.
• While the largest four banks held more than 89 percent of the total banking industry notional amount of derivatives, 1,414 U.S. commercial banks and savings associations held derivatives at the end of the first quarter 2017, down from 1,420 in the fourth quarter 2016 and from 1,424 in the first quarter 2016.

Related Link

• OCC's Quarterly Report on Bank Trading and Derivatives Activities: First Quarter 2017