Commodity Revenue for Investment Banks Plunges in 2012

Revenue for investment banks from commodities dropped in 2012, with intrusive regulations and increased capital requirements resulting in less interest from clients. Another factor was volatility for the year was relatively low, also affecting interest in the sector.

The drop was a huge 25 percent from 2011, with revenue coming in at $6 billion for 2012, down significantly from the $8 billion in revenue generated the year before.

Ten banks were by consultant Coalition, including Bank of America/Merrill Lynch (BAC), Barclays (BCS), Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), JP Morgan (JPM), RBS (RBS), Goldman Sachs (GS), Morgan Stanley (MS) and UBS (UBS).

A report released by Coalition said, "Low volatility and reduced client activity led to a 24 per cent drop in revenues. Energy, investor products and precious metals options businesses were notably affected.

"Performance was also subdued by ongoing concerns about increased regulation and capital sensitivity, pushing banks to re-evaluate their commodities strategies."

In its quarterly results last month, Morgan Stanley said the commodity revenue for the fourth quarter was the lowest since 1995.

Citigroup (NYSE:C) Selling Shares in Monex

In its ongoing strategy of divesting of its Japanese assets, Citigroup (NYSE:C) will sell its shares in Monex Group Inc.

The sell of the 503,250 shares will reduce the stake of Citigroup in Monex from 20.6 percent to 3.6 percent, according to a Monex statement.

Citi did say they'll continue to look for retail opportunities with Monex as it continues to exit the brokerage business.

The price of the shares will be determined by Monex sometime from October 4 to October 7

Chief Executive Officer Vikram Pandit said in 2009 after writedown and credit losses of over $100 billion, that they were going to focus on banking going forward, rather than the investment banking side.