Trading revenue of U.S. commercial banks and savings associations dropped in the third quarter, according to the Office of the Comptroller of the Currency (OCC).
Trading revenue stood at $6.4 billion at the end of the third quarter, down $241 million, or 3.6 percent, from the previous quarter.
Further, trading revenue in the third quarter 2017 was down 0.4 percent from the third quarter of 2016, the OCC reported in its latest Quarterly Report on Bank Trading and Derivatives Activities.
The quarterly decrease was due mainly to drops in interest rate and foreign exchange (FX) revenue, which fell $743 million to $4.5 billion. The drop in these categories was partially offset by an increase in the remaining trading revenue classes.
The OCC also found that trading risk, as measured by value-at-risk (VaR), decreased in the third quarter. The average VaR across the top five dealer banking companies fell to $256 million, a drop of $17 million, or 6.2 percent, from the second quarter of 2017.
In addition, the report revealed that centrally cleared derivatives transactions rose to 39.6 percent in the third quarter 2017, up from 39 percent in the third quarter 2016.
Finally, the report said that 1,391 U.S. commercial banks and savings associations held derivatives at the end of the third quarter.