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News Release 2016-38 | March 30, 2016

OCC Reports Fourth Quarter 2015 Bank Trading Revenue Declines to $4.3 Billion

WASHINGTON—Trading revenue of U.S. commercial banks and savings associations fell to $4.3 billion in the fourth quarter of 2015 down from $5.3 billion in the previous quarter, according to a report released today by the Office of the Comptroller of the Currency (OCC).

The revenue declined by 20 percent from the third quarter and by 4 percent from a year ago, according to data presented in the OCC's Quarterly Report on Bank Trading and Derivatives Activities for the fourth quarter of 2015. The decline in the fourth quarter reflects a strong seasonal trend in trading revenue.

The report also shows that the notional amount of derivatives held by insured U.S. commercial banks declined $11 trillion during the fourth quarter to $181 trillion. The decline results from industry efforts to eliminate offsetting trades, an activity known as trade compression, rather than a significant reduction in the volume of trading activity.

The OCC also reported:

  • Trading risk exposure, as measured by average value-at-risk (VaR), decreased in the fourth quarter of 2015.
  • Receivables from interest rate contracts decreased $345 billion in the fourth quarter, to $2.1 trillion.
  • The percentage of centrally cleared derivatives transactions decreased slightly to 37 percent in the fourth quarter of 2015, from 38 percent in the previous quarter. Clearing has developed most in interest rate derivatives, where 46 percent were cleared.
  • While the largest four banks held 91 percent of the notional amount of derivatives, 1,410 U.S. commercial banks and savings associations held derivatives in the fourth quarter of 2015, down from 1,415 in the previous quarter.

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