* Hit by lower volatility, weak prices
* Also some banks left commodity sector
* Pressured by financial crisis, regulation
LONDON, Nov 16 Investment bank revenue from
commodities trading slid by a fifth during the first nine months
of the year due to lower volatility and weak prices, financial
sector consultant Coalition said.
Turnover was also hit as some banks exited from the sector,
Coalition added in a report on overall investment bank
performance so far this year.
Investment banks are being squeezed in the commodities
sector, hit by the global financial crisis and tighter
Commodity revenue from the top 10 investment banks fell to
$5.18 billion in the first nine months of the year from $6.4
billion in the same period in 2011, Coalition said.
"There were double digit revenue declines in commodities...
due to reduced volatility and generally lower underlying
commodity prices," the report said, adding the figures were also
depressed due to outperformance in the first half of last year.
It said turnover in the third quarter declined to $1.54
billion from $1.92 billion last year, down 20 percent.
"With the exception of metals, performance was weak across
all products. For several... banks, there were strategic exits
of the business line due to regulatory and/or capital
Coalition did not identify the banks which have closed down
commodity units, but both UBS and RBS have
reduced exposure to the sector this year.
The other eight banks that Coalition tracks are Bank of
America/Merrill Lynch, Barclays, Citigroup
, Credit Suisse, Deutsche Bank,
Goldman Sachs, JP Morgan and Morgan Stanley