Scotiabank Q2 commodity trading revenue boosted by precious metals
NEW YORK May 27 (Reuters) - Bank of Nova Scotia, one of the world's biggest bullion banks, on Tuesday reported its best quarterly trading revenue from commodities in over a year due to improving precious metals markets even as scrutiny of global bullion pricing intensifies.
In its second quarter to end-March, Canada's third-largest bank said trading revenue from commodities hit C$98 million, up 9 percent from the prior quarter and highest since the first quarter to end-December 2012, according to a filing.
Commodities was the second-biggest revenue driver in its trading operations after interest rates and credit, accounting for almost a quarter of the total.
In a statement, Scotiabank said global banking and markets net income was boosted by stronger results in precious metals as well as lending and fixed income offset a decline in global equities and Canadian lending.
The results may reflect improving confidence among institutional and retail investors after the gold market's roiling last year. Prolonged strikes in South Africa, a major platinum and palladium producer, also attracted investor interest this year amid concerns about tight supplies.
Even so, the results come at a critical time for bullion banks as century-old gold and silver price-setting benchmarks come under increasing regulatory and legal scrutiny, causing upheaval in global precious metals trading.
Scotiabank is one of four banks that owns a seat on the 95-year old London gold "fix", which is used as a global benchmark for bullion trading. It is one of two remaining banks alongside HSBC on the silver fix.
On Friday, Barclays Plc was slapped with a $44 million fine over attempted manipulation of the gold fix. A source familiar with the fine said it was a one-off and not part of a wider investigation into gold price rigging.
But the move rocked precious metals markets just weeks after news the 117-year-old silver fix will wind down in August following Deutsche Bank's decision to pull out of the fix. Continued...