Publications:
Quarterly Derivatives Fact Sheet -- First Quarter 1997

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 first quarter alone, and are not annualized.

Relative to the fourth quarter of 1996, commercial banks reporting derivatives contracts in the first quarter of 1997 show an aggregate increase in trading revenues from cash instruments and derivatives activities of $517 million, or 28 percent. The revenue figures reported for trading activities in the first quarter indicate that the banks with derivatives realized approximately $2.38 billion in revenue for the first quarter from cash instruments and off-balance sheet derivative, with the top eight banks accounting for 86 percent of these trading revenues. In the first quarter, revenues from interest rate positions increased by $360 million, generating $1.35 billion, while revenues from foreign exchange positions declined by $77 million, to $690 million. Revenue from other trading positions, including equities and commodities positions, increased by $234 million, generating $343 million in revenues, with approximately 95% of that amount in the top eight banks. [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 $333 million, or .4 percent to the gross revenues of banks with derivative contracts in the first quarter. These figures reflect an increase of $153 million from the fourth 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.