Major banks’ commodities revenue up 9 pct in 2014-report

Feb 19 (Reuters) – Commodities revenue at the top 10 investment banks climbed by 9 percent last year, reversing three years of declines, due to increased activity in energy markets as oil went into freefall, a consultancy said on Thursday. Revenue earned by leading banks from commodity trading, selling derivatives to investors and other activities in the sector rose to $4.9 billion from $4.5 billion in 2013, London-based financial industry analytics firm Coalition said. “Despite significant business downsizing, revenues rose due to increased activity in the energy markets. Meanwhile, metals continued to be impacted by regulatory pressures and weak underlying demand,” Coalition said. Higher volatility in financial markets typically opens up more trading opportunities. Brent oil prices tumbled nearly 50 percent last year due to a global glut of crude oil and as the Organization of the Petroleum Exporting Countries failed to cut output. In 2013, commodity revenues dropped 18 percent in the third year of declines due to weak investor interest and low volatility. Despite the recovery in top banks’ commodities revenue last year, it was still just over a third of the $14.1 billion they racked up in 2008 at the height of the commodities boom. Many investors … continue reading

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