Commodity revenues of major banks collapsed to an 11-year low

Commodity revenues of the major banks has suffered another serious blow in the first half of 2017, sinking to 11-year low, amid weaker performance of the energy sector. The total revenue of the 12 largest banks, including Goldman Sachs and JPMorgan Chase, plunged by 41% to 1.3 billion USD in the first six months of the year. The revenues for energy and natural gas have been hit particularly hard.
Banks' commodity revenues have shrunk over the past few years, amid stronger regulatory controls, low volatility, restrictions on equity trading, and the disappearance of their customers hedge funds. The fall this year is likely to reflect a weak performance of Goldman Sachs, which former derivatives sub-division is now experiencing difficulties.
The environment as a whole continues to be negatively linked to the commodity business. Given the lack of volatility for banks, it is becoming more and more difficult to generate money through trading.
Goldman Sachs, which is the largest commodity bank in 2016, told investors earlier this year that the raw materials division had suffered its worst quarter for almost two decades. Goldman's raw materials division has brought about 95 million USD in the first three months of the year and barely managed to get green in the second quarter.
The Bloomberg Commodity Index, which monitors the returns of 22 commodities, shows a slight change this year. Sugar, natural gas and crude oil are among the worst performing.
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