(Updates lead, RBS Sempra)
LONDON, Nov 4 (Reuters) - Banks are boosting their
commodities staff to take advantage of the upswing in prices
this year and greater investor risk appetite.
Bank of America (BAC.N), which last autumn acquired Merrill
Lynch and its businesses, including commodities, plans to expand
its new commodities team by 25 percent over the next two to
three years.
Credit Suisse (CSGN.VX) plans to add 100 staff on
commodities in the next 18 months. [ID:nL3492156]
The main exception is the Royal Bank of Scotland which is
being forced to divest its stake in its commodities joint
venture with utility Sempra (SRE.N) within the next four years
to comply with the European Commission's requirements on state
aid. [ID:nBNG474338]
The shake out of the banking industry has created new
opportunities for the remaining players, both in terms of
recruitment and market share.
Aside from Merrill Lynch, other banks that used to play a
significant role in commodities include the now bankrupt Lehman
Brothers, which has been acquired by Barclays, and UBS (UBS.N)
-- which axed most of its commodities businesses in the
aftermath of the global financial crisis.
Banks not already active in spot markets are now trying to
establish a foothold there, partly because of concerns about
regulatory changes in the derivatives realm. [ID:nCFTCREG]
Standard Chartered (STAN.L) expects to start trading
commodities on a spot basis next year. Those already with a
strong presence in spot markets such as Barclays Capital
(BARC.L) and Credit Suisse (CSGN.VX) are expanding.
MITSUBISHI UFJ (8306.T)
Global head - Tetsuro Kono
History - The bank has been in the market 20 years and it is
active in oil, freight, coal and emissions.
Growth plan - The bank will focus on commodities and energy
derivatives and expects this to account for 20 percent of its
revenue in two years, from 5-10 percent now. [ID:nL751676]
BANK OF AMERICA (BAC.N)
Global co-heads -- David Goodman and Rob Jones, based in
London and Houston respectively.
History -- Merrill Lynch acquired the energy trading
businesses of Entergy-Koch, LP.
Focus -- Bank of America Merrill Lynch's commodities
business includes structuring, trading and marketing natural
gas, power, crude oil, refined products, coal, emissions,
metals, commodity indices, and structured notes. The company is
involved in both financial and physical markets.
Growth plan -- In August 2009, the company announced that it
intends to expand its commodities team by 25 percent over the
next two to three years in anticipation of a strong demand for
commodities. In Q3, it made a number of key hires in Asia and
the US, including a new head of west power trading, and a head
of NYMEX gas option trading.
DEUTSCHE BANK (DBKGn.DE)
Global head -- David Silbert
History -- Launched a five-year expansion plan in
commodities and energy in 2007.
Focus -- Deutsche is active in oil, refined products,
metals, gas, power, agriculture and carbon markets as well as
financial investor products.
It has a spot presence in metals and uranium but is not
active in the physical oil business.
Growth plan -- It has increased its headcount by 15 percent
so far this year and plans to continue hiring in 2010.
It recently opened a new office in Houston, Texas and
started trading U.S. power and gas. A bank spokesman said it had
experienced "spectacular" growth in Asia this year.
The bank said it has launched 11 new commodity indices,
three new commodity systematic mutual funds and one new
commodity exchange traded fund this fiscal year.
BNP PARIBAS (BNPP.PA)
Global head -- Lincoln Payton
Staff -- Over 1,000
History -- Started in commodity derivatives more than 20
years ago and in commodity financing 50 years ago.
Focus -- Active in trading crude, oil products, natural gas,
European power as well as base metals and soft commodities.
The bank is traditionally strong in structured financing and
helped finance oil major Total's (TOTF.PA) Yemen LNG project due
to come on stream in the next few weeks. [ID:nL6362838]
Growth plan -- The bank said in an e-mailed statement it is
expanding its derivatives business to cater to hedge funds.
It is expected to double revenues in commodity derivatives
by 2012, supported by the acquisition of activities from Fortis,
a bank executive told the Financial Times. [ID:nL6228628]
