Big banks' nine-month commodities revenue drops 18 pct - report

Reuters

* Cites poor performance in investor products, power and gas

* Full-year commodities revenue seen down 14 pct

* Says inventory financing remains robust

LONDON, Nov 14 (Reuters) - Commodities revenue slid by 18percent in the first nine months of the year at the top 10investment banks, partly because of poor performance in investorproducts and power and gas, a consultancy said on Thursday.

Many banks have reduced their commodities business, hit byincreasing regulation and higher capital requirements after theglobal financial crisis.

Revenue from commodities for top banks fell to $4 billionduring the first three quarters of 2013, down from $4.9 billionin the same period last year, London-based financial industryanalytics firm Coalition said in a report.

Full-year commodity revenues are forecast to decline by 14percent to $4.7 billion, it added.

Poor performance in investor products and power and gascontinued into the third quarter of 2013 while oil revenues werein line with the first half of the year and metals remainedstable, Coalition said.

"Across commodities products, however, inventory financingactivities were more robust."

Deutsche Bank told Reuters last month thatinventory financing in Asia was growing at 10-20 percent a yearand has expanded into a business where up to $20 billion ofshort-dated deals are in place at any one time.

Wall Street investment banks typically do not break downtheir commodity revenue, preferring to cite it as part of thebroader fixed income, currency and commodities category (FICC).

Overall FICC revenues in the first nine months dropped by 19percent to $60 billion and the full-year figure is expected tocome in at $73.6 billion, down 20 percent, Coalition said.

Last year investment bank Goldman Sachs took the topspot for commodities revenue, followed by JPMorgan Chase and Morgan Stanley, Coalition said in March.

The other banks Coalition tracks are: Bank of AmericaMerrill Lynch, Barclays, BNP Paribas,Citigroup, Credit Suisse, Deutsche Bank and UBS.

The 19-commodity Thomson Reuters-Jefferies CRB index has shed 7.3 percent so far this year.

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