WASHINGTON — Bank trading revenue in the second quarter rose by more than 25% from a year earlier to $6.9 billion on rising combined interest rate and foreign exchange revenue, according a report issued by the Officer of the Comptroller of the Currency on Tuesday.
Interest rate-related trading revenue during this period fell to $1.9 billion, from $3.1 billion a quarter earlier, but was strongly offset by a concurrent increase in foreign exchange trading. Foreign exchange revenue rose to $3.7 billion, from $1.4 billion in the first quarter.
There were other bright spots. Trading risk exposure dropped in the second quarter, though credit exposure rose. There were also an additional 21 banks and savings associations involved in derivatives trading in the second quarter compared with the beginning of the year. Meanwhile, 39.1% of derivatives transactions were centrally cleared in the second quarter, compared with only 36.5% in the previous quarter.
The OCC also reported that notional derivatives fell 1.6% to $189.8 trillion from last quarter. The agency attributed the decrease to trade compression, or the exercise of aggregating similar swaps contracts.