Trading revenue drops in Q4, according to OCC report

The trading revenue from U.S. commercial banks and savings associations totaled $11.6 billion in the fourth quarter of 2023, according to the Office of the Comptroller of the Currency (OCC).

The OCC’s report, Quarterly Report on Bank Trading and Derivatives Activities, found that fourth quarter trading revenue was down $1.6 billion, or 11.8 percent, from the previous quarter. Further, it was about $2 billion, or 20.4 percent, lower than it was in the fourth quarter of 2022.

The OCC also reported that, as of the fourth quarter of 2023, there were a total of 1,185 insured U.S. national and state commercial banks and savings associations that held derivatives. It also revealed that four large banks held 87.4 percent of the total banking industry notional amount of derivatives.

In addition, it said that credit exposure from derivatives decreased in the fourth quarter of 2023 compared with the third quarter of 2023. Further, net current credit exposure decreased $68.0 billion, or 22.0 percent, to $240.0 billion. Additionally, derivative notional amounts decreased Q4 by $11.7 trillion, or 5.7 percent, to $192.5 trillion.

Finally, the report noted that derivative contracts remained concentrated in interest rate products, which totaled $136.3 trillion or 40.8 percent of total derivative notional amounts.

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