Publications:
Quarterly Derivatives Fact Sheet -- Third Quarter 1997
Read Section: General.......Risk.......Revenue.....High-risk Mortgage Securities and Structured Notes
REVENUES
The Call Report data include revenue information regarding cash
instruments and off-balance sheet derivative trading activities.
The data also show the impact on net interest income and non-interest income from derivatives used in non-trading activities.
Note that the revenue data reported in Table 7 reflect figures for the third quarter alone, and are not
annualized.
Relative to the second quarter of 1997, commercial banks
reporting derivatives contracts in the third quarter of 1997 show
an aggregate increase in trading revenues from cash instruments
and derivatives activities of $510 million, or 26 percent. The
revenue figures reported for trading activities in the third
quarter indicate that the banks with derivatives realized
approximately $2.5 billion in revenue for the third quarter from
cash instruments and off-balance
sheet derivative, with the top
eight banks accounting for 85 percent of these trading revenues.
In the third quarter, revenues from interest rate positions
increased by $234 million, generating $1.2 billion, while
revenues from foreign exchange positions increased by $162
million, to $1.1 billion. Revenue from other trading positions,
including equities and commodities positions, increased by $112
million, generating $228 million in revenues, with approximately
99 percent of that amount in the top eight banks. Note: users of
this report are reminded that these results are for the third
quarter ending September 30, 1997 and do not reflect the market
volatility experienced thus far in the fourth quarter. [See
Table 7.]
Derivatives held for purposes other than trading did not have a
significant impact on either net interest income or non-interest
income in the third quarter. Non-traded derivatives contributed
a loss of $28 million, or .03 percent to the gross revenues of
banks with derivative contracts in the third quarter. These
figures reflect a decrease of $276 million from the second
quarter. Readers must be cautioned that these results are only
useful in the context of a more complete analysis of each bank's
asset/liability structure and management process.
High-risk Mortgage Securities and Structured Notes
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