Commercial banks reported total trading revenue of $22.7 billion in 2014, 3 percent higher than in 2013, according to the OCC’s Quarterly Report on Bank Trading and Derivatives Activities released today. “The modest increase in trading revenue during 2014 was due to better results from trading equity and commodity products, as interest rates and foreign exchange income, which drive bank trading revenue, didn’t really change much,” said OCC official Kurt Wilhelm.
Fourth-quarter revenue was $4.4 billion, down 22 percent from the previous quarter but 52 percent higher than the fourth quarter of 2013. “The year finished on a weak note, which is true almost every year,” Wilhelm explained. “The dealing firms and their clients generally reduce their risk appetite at the end of the year.”
The net current credit exposure rose 12 percent to $445 billion in the fourth quarter, the report said. The notional amount of derivatives banks held fell by 8 percent to $220 trillion.