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News Release 2016-76 | June 30, 2016

OCC Reports Increases in Bank Trading Revenue for First Quarter of 2016

WASHINGTON—Trading revenue of U.S. commercial banks and savings associations rose to $5.8 billion in the first quarter of 2016 from $4.3 billion in the previous quarter, according to a report released today by the Office of the Comptroller of the Currency (OCC).

The OCC's Quarterly Report on Bank Trading and Derivatives Activities for the first quarter of 2016 showed trading revenue increased by 35.3 percent from the fourth quarter of 2015 but decreased by 24.9 percent from a year ago. The increase in the first quarter reflects an increase in both combined interest rate and foreign exchange revenue, and credit revenue.

The report also shows that the notional amount of derivatives held by insured U.S. commercial banks increased $12 trillion during the first quarter to $192.9 trillion. This increase results primarily from growth in interest rate notionals.

The OCC also reported:

  • Trading risk exposure, as measured by average value-at-risk (VaR), increased in the first quarter of 2016.
  • Receivables from interest rate contracts increased $701 billion in the first quarter, to $3.7 trillion.
  • The percentage of centrally cleared derivatives transactions decreased slightly to 36.5 percent in the first quarter of 2016, from 36.9 percent in the previous quarter. Clearing was most prominent in interest rate derivatives, with 45.4 percent cleared.
  • While four banks held 91 percent of the notional amount of derivatives, 1,421 U.S. commercial banks and savings associations held derivatives in the first quarter of 2016, 11 more banks and savings associations than the previous quarter.

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