Revenue from commodity trading, selling derivatives to investors and other activities in the sector fell to $2.5 billion (1.78 billion pounds) in 2017 from $4.3 billion the previous year, it said in a report.

"Low volatility and subdued client activity, coupled with trading underperformance witnessed in 1H17, led to the overall decline," it said.

Revenue was the lowest since Coalition began analysing bank data in 2006, it said.

Banks' commodity revenue has been on a steady downward path in recent years as they have exited or slimmed down their commodity businesses due to heightened government regulation and poor performance from the sector.

A number of firms suffered heavy losses in the first half of 2017 after a slide in natural gas prices , while others lost money in the second half due to swings in oil prices during Hurricane Harvey, analysts have said.

Coalition did not mention individual banks, but in the second quarter Goldman Sachs (>> Goldman Sachs Group) posted the weakest commodities results in its history as a public company.

Coalition tracks Bank of America Merrill Lynch (>> Bank of America), Barclays (>> Barclays), BNP Paribas (>> BNP Paribas), Citigroup (>> Citigroup), Credit Suisse (>> Credit Suisse Group), Deutsche Bank (>> Deutsche Bank), Goldman Sachs (>> Goldman Sachs Group), HSBC (>> HSBC Holdings), JPMorgan (>> JP Morgan Chase & Company), Morgan Stanley (>> Morgan Stanley), Societe Generale (>> Société Générale) and UBS (>> UBS Group).

(Reporting by Peter Hobson, editing by David Evans)