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The report, released yesterday by the Office of the Comptroller of the Currency (OCC) shows US commercial bank trading revenues were $4.4bln in 4th quarter, 73pct higher than the $2.5bln in Q4, 2011.

Summary of the report:

• U.S. commercial banks trading revenues of $4.4 bln in the fourth quarter, 73% higher than $2.5 bln in the fourth quarter of 2011.
• Trading revenues in Q4 of 2012 were 17% lower than Q3 of 2012 revenues of $5.3 bln.
• Credit exposure from derivatives decreased in the Q4.  Net current credit exposure fell 3%, or $13 billion, to $386 billion.
• Trading risk exposure, as measured by Value-at-Risk (VaR), averaged $503 million at the 5 largest trading companies in 2012, 23% lower than $655 billion in 2011.
• Notional derivatives declined $3.8 trillion, or 2%, to $223 trillion.  Notionals have now declined in five of the past six quarters
• Derivative contracts remain concentrated in interest rate products, which comprise 80% of total derivative notional amounts.  Credit derivatives, which represent 6% of total derivatives notionals, declined 6% to $13 trillion.
• Derivatives trading dominated by four banks, representing 93% of the total banking industry notional amounts and 81% of industry net current credit exposure.

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