Commodities-related revenue at the 12 biggest investment banks fell 22 percent in the first nine months due to weak industrial metals trading and lacklustre investor interest, a report by financial industry analytics firm Coalition said. Revenue from commodity trading, selling derivatives to investors and other activities in the sector slid to $3.1 billion between January to September from $4 billion in the same period in 2015, the report published on Thursday found.
In 2015, the banks' commodities revenue dropped 18 percent, mainly due to slow business in metals and investor products, and also reflecting a return to more normal turnover in the power and gas markets after the previous year's surge. Oil and base metals prices have been volatile, slumping to multi-year lows before rebounding. US oil prices crashed below $27 a barrel on January 20 for the first time since 2003 but ended the third quarter at $48.
Benchmark copper prices hit a 6-1/2 year low of $4,318 a tonne on January 15 before rising to $4,865 by the end of September. Coalition tracks Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, Societe Generale and UBS.