* Deal excludes precious metals, index trades
* UBS has exited most commodities, slims down investment
* JPM seeking alternatives for physical commodity business
LONDON, Aug 6 U.S. bank JP Morgan Chase & Co
, which plans to stop trading in physical commodities,
has bought the over-the-counter business in commodity
derivatives of Switzerland's UBS AG, the banks said on
The deal excluded precious metals and index-based trades,
but included hedge positions on financial exchanges, UBS said in
a statement. No financial details were released.
Zurich-based UBS said in October it was closing the majority
of its commodities "flow" trading business involving raw
materials and financial derivatives as part of a slimming down
last year, in which it withdrew from large parts of fixed income
and laid off 10,000 employees.
The bank retained, however, its precious metals and
commodities index business as part of a strategy that put
increased emphasis on global asset management and wealth
UBS also remains active in commodity trade finance and has
expanded by hiring 10 bankers in Geneva in the sector since the
start of the year.
Tuesday's UBS statement said: "Risk on the portfolio has
been assumed by J.P. Morgan and they (the two banks) will work
together in the coming months with their clients to fully assign
contracts for individual trades to J.P. Morgan."
"This transaction is a further step for UBS in executing its
strategic plan to refocus and simplify the investment bank".
JP Morgan confirmed the purchase but offered no further
comment or details.
Last month, JP Morgan announced plans to exit physical
commodities trading and pursue "strategic alternatives", but
said it would continue to trade in financial commodities such as
derivatives and precious metals.