NEW YORK, March 20 Trading revenue at U.S. banks
increased 73 percent last quarter, on a surge in trading of
over-the-counter interest rate derivatives, according to a
report on Wednesday by the Office of the Comptroller of the
U.S. commercial banks and savings institutions reported
trading revenue of $4.4 billion during the last three months of
2012, up from $2.5 billion in the same period a year earlier.
Interest-rate trading revenue represented 95 percent of
total trading revenue, and more than made up for sharp declines
in commodities and foreign exchange trading, and a $713 million
loss from trading in credit products.
Kurt Wilhelm, director of the Financial Markets Group at the
OCC, said it was a record fourth quarter for U.S. banks.
"Reduced concerns about Europe and an improving U.S. economy
led to increased risk appetite across the financial markets," he
said in a press release.
However, for the full year, trading revenue declined 30
percent from a record set in 2011, mainly due to $7.6 billion
worth of losses from the trading of credit products.
The OCC's report also showed that the notional amount of
derivatives held by U.S. banks fell to $223 trillion, a 2
percent decline from the prior quarter. Derivatives are
financial products whose values are pegged to other assets,
including stocks, bonds and commodities.
JPMorgan Chase & Co, Citigroup Inc, Bank of
America and Goldman Sachs Group Inc remained the
four banks with the largest exposure to derivatives. Together,
those four institutions represent 93 percent of the derivatives
market measured by the OCC.