Goldman Sachs Keeps Top Spot in Commodities Revenue in 2016

  • Major banks’ revenue from commodities sank even as prices rose
  • Canadian and Australian lenders have expanded in commodities

Goldman Sachs Group Inc. kept its top spot in commodities last year, bringing in more revenue than other banks even as earnings from the industry slumped.

JPMorgan Chase & Co. and Citigroup Inc. were ranked second and third respectively, according to a report from Coalition Development Ltd., a London-based analytics company.

Overall, major banks’ commodities revenue sank to an 11-year low in 2016, Coalition said last month. Poor performance in oil were partially offset by improvement in the U.S. power and gas markets.

Banks’ commodities revenues have slumped from their peak in 2008. More regulatory scrutiny, curbs on proprietary trading and reduced investment by their hedge-fund clients and other large traders have hurt profits. That forced some lenders to reduce or cut their exposure to commodities completely.

Australian and Canadian banks, which aren’t included in Coalition’s analysis, are expanding in commodities, taking up business left by other lenders, according to Amrit Shahani, research director at Coalition.

“Other than the French banks, we don’t really see any of the European banks competing in this space,” Shahani said.

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