* FICC revenue at 12 top banks $69.9 bln last year -Coalition
* Compares with $109.1 billion five years before
* Commodities revenues drop 18 percent
* Equity business is rare bright spot, revs up 10 pct to $50bln
By Anjuli Davies
LONDON, Feb 22 (Reuters) - Revenue at the world's 12 largestinvestment banks from trading fixed income, currencies andcommodities, known as FICC, fell 9 percent in 2015 compared witha year before, a survey showed on Monday, dragged down byregulatory changes and retrenchment.
Eight years after the global financial crash, banks arestill struggling to adjust to reforms compelling them to holdmore capital and liquidity, while litigation costs and marketvolatility have forced them to restructure, shed staff and exitsome business lines.
Such trends have reduced the FICC activities which had beentheir most profitable business.
FICC trading revenue at 12 of the world's biggest banks was$69.9 billion last year, down from $109.1 billion five yearsbefore, according to the survey by industry analytics firmCoalition, based on its analysis of their public disclosures andindependent research.
Coalition tracks Bank of America Merrill Lynch
Poor trading results and low client activity in the secondhalf of 2015 contributed to an overall 3 percent declinecompared to a year ago in investment banking revenue across theworld's major banks, to $160.2 billion, the data showed.
SLOW BUSINESS
In commodities, revenues dropped by 18 percent, mainly dueto slow business in metals and investor products, and alsoreflecting a return to more normal turnover in the power and gasmarkets after last year's surge.
Revenue earned by leading banks from commodity trading,selling derivatives to investors and other activities in thesector fell to $4.6 billion from $5.6 billion in 2014, it said.
"A normalisation of the U.S. power and gas markets andweakness in metals and investor products drove the overalldecline," Coalition said. "In contrast, oil revenues improved ascorporate client activity increased."
In 2014, a cold winter in North America had createdvolatility and boosted activity in power and gas, while tradingsurged in the oil sector last year due to a sharp fall and thenpartial recovery in prices.
Banks' equity businesses, including cash equities, equityderivatives, prime services (serving hedge funds) and futuresand options, were bright spots. Revenue rose 10 percent to $49.8billion year-on-year.
Elsewhere, investment banking divisions (IBD), which adviseon mergers and acquisitions (M&A) and equity and debtunderwriting, saw a 5 percent fall in revenue to $40.5 billion,as a surge in M&A activity was offset by declines in equity anddebt capital markets activity.
Headcount at the top banks fell 2 percent from a yearbefore. Cuts were felt in FICC, where there was a 4 percentdecline in staffing levels.
Return on equity (RoE) declined slightly to 9.2 percent from9.3 percent, due to both increased capital requirements and weakperformance, Coalition said. (Editing by Katharine Houreld and David Holmes)
Barclays (BARC)
HSBC Holdings (HSBA)
