Trading revenues at US bank holding companies fell sharply in the second quarter from the first quarter but remained much higher than a year earlier, according to a government report released on Friday. Trading revenues totalled $17 billion during the second quarter, down 18 percent from the first quarter but up 24 percent from a year ago, the Office of the Comptroller of the Currency's quarterly report showed.
Trading revenues are expected to continue to tumble in the third quarter as large banks struggle with market volatility and clients' aversion to risk-taking. Earlier this month, J.P. Morgan Chase & Co's investment banking head, Jes Staley, said trading revenue in the third quarter was running 30 percent below the second quarter.
The OCC report shows trading revenues were down across several categories, including interest rates and commodities. Revenues in commodity and related trading, for instance, dropped 48 percent from the first quarter, to $1.4 billion in the second quarter. Most of the trading tracked by the report is concentrated in the largest banks, such as Goldman Sachs.
The main focus of the report is trading revenue at commercial banks, which are part of the larger holding companies. The OCC regulates national banks. Trading revenue at commercial banks was $7.4 billion in the second quarter, according to the report. That was down 1 percent from the first quarter, but the OCC said the drop was smaller than anticipated. "While the decline was expected, it was more muted than in prior years, indicating relatively strong results," Martin Pfinsgraff, the OCC's deputy comptroller for credit and market risk, said in a release.
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