May 20 Reuters – Commodities revenue at the top 10 investment banks slid by 28 percent in the first quarter after power and gas activity returned to normal levels after last year’s jump, a consultancy said on Wednesday. Revenue earned by leading banks from commodity trading, selling derivatives to investors and other activities in the sector declined to $1.6 billion in the first three months of the year compared to the same period of 2014, London-based financial industry analytics firm Coalition said. “Revenues declined due to the absence of one-off gains in power and gas. This weakness was partially offset by an increase in oil trading results,” Coalition said. Last year, a very cold winter in North America created volatility and boosted activity in power and gas while this year trading has increased in the oil sector due to a sharp fall and partial recovery in prices. Higher volatility in financial markets typically opens up more trading opportunities. The banks’ commodities revenue climbed by 9 percent to $4.9 billion during the whole of last year, reversing three years of declines, due to increased activity in energy markets as oil went into freefall. Despite the recovery in top banks’ commodities revenue … continue reading
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Source: CTRM Center