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Update on Bank Revenues

Trading revenue of U.S. commercial banks and federal savings associations of $7.2 billion in the Q4 2019, which was $4.0 million, or 0.1% less than the previous quarter, according to the Office of the Comptroller of the Currency (OCC).

While four large banks held 85.7% of the total banking industry notional amount of derivatives, a total of 1,324 insured U.S. commercial banks and savings associations held derivatives at the end of the fourth quarter 2019.

Derivative contracts remained concentrated in interest rate products, which represented 72.9% of total derivative notional amounts. The percentage of centrally cleared derivatives transactions decreased quarter-over-quarter to 37.1% in the fourth quarter 2019.

Many U.S. banks are underperforming in the wake of COVID-19, but according to research from Forbes, there are a few “bright spots.” Forbes’s portfolio of nine stocks showed an average return of 11% in the last five trading days compared with a 13% return in the Dow during the same period.

The top 3 performers within the portfolio in the last five trading days were, Citigroup (15.1% return), Morgan Stanley (14.6% return), JPMorgan (14.4% return). On Friday, the top 3 performers were U.S Bancorp (-1.1% return), BNY Mellon (-1.4% return), State Street (-1.5% return).

Top performer Citigroup’s market cap has declined by $86.6 billion from about $178.5 billion on December 31, 2019 to $91.9 billion now. The company had $74.3 billion in revenue in 2019, from which it derived $19.4 billion in net income and $8.08 in earnings per share.

S&P Global Ratings believes the effects of the COVID-19 pandemic have likely pushed the world economy into recession, dragging full-year GDP global growth down to just 1-1.5%.

"We project China's economy to expand 2.7%-3.2%, and the eurozone economy to contract 0.5%-1.0% in 2020," they said in a statement.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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