OCC: Bank Trading is Up, Credit Risk is Down Bank Trading Revenue Banks Credit Risk Exposure OCC 2017-01-04 Seth Welborn in Daily Dose, Data, Featured, News Share January 4, 2017 646 Views The Office of the Comptroller of the Currency (OCC), in its Quarterly Report on Bank Trading and Derivatives Activities for Q3 2016, found that trading revenue for commercial banks and savings associations declined over-the-quarter but rose substantially over-the-year in the third quarter last year.The OCC reported that bank trading revenue dropped by nearly 9 percent from Q2 to Q3 in 2016, from $7 billion down to $6.4 billion—but at the same time, which “reflects a decline in combined interest rate and foreign exchange revenue,” according to the OCC. At the same time, bank trading revenue shot up by nearly 20 percent from Q3 2015 to Q3 2016, an increase of approximately $1.1 billion.According to the OCC, bank trading results in the second and third quarters were the second-highest since 2000 for each quarter.While trading revenue was way up for banks, net current credit exposure (NCCE), the metric the OCC uses to evaluate credit risk in bank derivative activities, was way down over-the-quarter. The OCC reported that NCCE for banks and savings associations in the U.S. declined by 4.7 percent (approximately $24 billion) over-the-quarter in Q3, down to approximately $481.7 billion at the end of the quarter.NCCE is down substantially from its peak of $804.1 billion at the end of 2008 in the midst of the financial crisis at a time when interest rates were very low and credit spreads were very high, according to the OCC.“The significant decline in NCCE since 2008 has largely resulted from declines in the gross positive fair value (GPFV) of interest rate and credit contracts,” OCC reported.Also according to the OCC, 1,438 commercial banks and savings associations in the United States held derivatives in the third quarter while four banks held almost 90 percent of the notional amount of derivatives, defined by the OCC as the “nominal or face amount that is used to calculate payments made on swaps and other risk management products.”Click here to view the OCC’s complete report.
Go back to the e-newsletter >This week, Disney began sales of Four Seasons Private Residences Orlando at Walt Disney World Resort, the most recent phase of development in the luxury resort-residential community of Golden Oak. Offering private entry to Four Seasons Resort Orlando, these single-family custom homes include access to a full-service spa, five pool areas, tennis courts and six onsite restaurants.The Resort will also offer these home-owners in-home á la carte services such as spa treatments, residential cleaning and in residence dining and catering for parties. Residents will also have á la carte access to the Kids for All Seasons program for an additional fee. All services and amenities available through Four Seasons Resort Orlando will be overseen by a dedicated Residence Manager.“Homeowners at Golden Oak have the rare opportunity to create unforgettable memories with family and friends for generations to come,” said Page Pierce, vice president of Disney Resort Real Estate Development. “Located within the community of Golden Oak, Four Seasons Private Residences Orlando at Walt Disney World Resort combines two brands renowned for impeccable service, outstanding amenities and exceptional experiences: Walt Disney World Resort and Four Seasons Hotels and Resorts.”Four Seasons Private Residences Orlando will include three collections of approximately one-half acre home sites. These custom residences, ranging in size from 6,000 to over 10,000 square feet, will feature three European-inspired styles embodying Venetian, Italianate and Spanish Revival architectural precedents. Home owners will also have the option to include a Four Seasons butler pantry allowing in-home deliveries of everything from groceries to linens, while not permitting staff access to the primary residence.Owners of Four Seasons Private Residences will be members of the Golden Oak Club. As members of the Club owners will have access to other amenities including Summerhouse, the private community clubhouse featuring the full-service Markham’s dining room and Tyler’s Lounge and concierge-style Resident Services which organizes a variety of engaging activities and events throughout the year, including seasonal parties and private theme park events, as well as, park transportation, golf services, and more.The Golden Oak community offers the only current opportunity for families to own homes at Walt Disney World Resort. The community welcomed its first residents in 2012 and Four Seasons Resort Orlando opened in August 2014. Four Seasons Private Residences* prices start at $5 million and construction is anticipated to begin later this summer. For more information about Four Seasons Private Residences Orlando at Walt Disney World Resort, visit www.orlandoprivateresidences.com or call Golden Oak Realty at (407) 939-5577.Go back to the e-newsletter >