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Top banks' commodities revenue up 6% in first quarter - report

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LONDON (Reuters) – Commodities-related revenue at the 12 biggest investment banks was 6% higher in the first three months of this year than in the same period in 2018 thanks to increased earnings from oil, consultancy Coalition said on Thursday.

The increase follows a rebound in commodities revenue at the 12 banks last year from its lowest in more than a decade in 2017. That rise came from power, gas and base metals.

Banks’ commodity revenue has been on a steady downward path since the global financial crisis as heightened government regulation and poor performance made them shrink their commodities businesses.

Commodities-related revenues for the top 12 banks last year were $3.6 billion, down from $15.9 billion in 2008, according to Coalition.

In the first quarter of this year, revenue from commodity trading, selling derivatives to investors and other activities in the sector was $1.2 billion, the financial industry analytics firm said.

“(The) revenue increase was mainly driven by oil. U.S. power and gas declined from strong results in 1Q18. Metals revenue declined due to the lack of one-off gains in base metals,” Coalition said.

The 12 banks Coalition tracks for its quarterly reports are Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Societe Generale and UBS.

(Reporting by Peter Hobson. Editing by Jane Merriman)

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