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Big banks post 25 pct drop in H1 commodity revenue - report
August 5, 2013 / 8:59 AM / 4 years ago

Big banks post 25 pct drop in H1 commodity revenue - report

* Consultants cite weaker investor interest, low volatility

* Investor products, power and gas show biggest declines

* Banks’ commodity businesses struggle, hit by regulations

LONDON, Aug 5 (Reuters) - Commodity revenue slid by about a quarter in the first half of the year at the top 10 investment banks, mainly due to lack of investor interest and placid markets, a consultancy said on Monday.

Banks have struggled in recent years with their commodity businesses, hit by increasing regulation and higher capital requirements in the wake of the global financial crisis.

“Commodities performance for Coalition index banks declined by approximately 25 percent in 1H 2013 relative to 1H 2012,” London-based industry analytics firm Coalition said in a brief statement, without giving financial figures.

“This was mainly due to lower client activity and lack of volatility. On a relative basis, investor products and power and gas had the largest decline.”

Wall Street investment banks typically do not break down their commodity revenue, preferring to cite it as part of the broader fixed income, currency and commodity category.

Last year, investment bank Goldman Sachs took the top spot for commodity revenue, followed by JPMorgan Chase and Morgan Stanley, Coalition said in March.

The other banks Coalition tracks are: Bank of America Merrill Lynch, Barclays, Citigroup, Credit Suisse, Deutsche Bank, RBS and UBS.

The 19-commodity Thomson Reuters-Jefferies CRB index has shed 4 percent so far this year.

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