SINGAPORE, Jan 10 (Reuters) - Goldman Sachs Group Inc has hired veteran oil trader Quek Chin Thean to head its commodities trading team in Asia-Pacific, a spokeswoman for the Wall Street bank said.
The appointment of Quek comes as investment banks are under pressure to comply with stringent Dodd-Frank regulations aimed at limiting excessive risk-taking by banks after the 2008 financial crisis, while struggling to keep their market share in the lucrative commodities market.
“Perhaps Goldman is contemplating going back into physical oil trading in a big way as a strategy post Dodd-Frank,” said an oil industry observer.
“The Dodd-Frank act has really got the U.S. banks at its sides. They have to recast their activities to comply with it.”
Quek will be based in Singapore and is due to start in March, Goldman spokeswoman Connie Ling said.
Goldman said in October significantly lower revenues from commodities dragged down its trading businesses in the third quarter, singling out weak performance by a unit that had once been a pride of Wall Street’s biggest investment bank.
Trade in physical markets helps to ease the impact of the regulation and provides a buffer to the bank’s business model that has been hit by generally lower interest in derivatives trade over the past few years.
Goldman has developed a physical metals trading desk in the past few years and already owns warehousing operations licensed by the London Metal Exchange.
In November, Quek resigned from his position as the chief executive of Chinese oil trader Brightoil Petroleum (Holdings) Ltd’s Singapore unit.
Quek, previously global head of fuel oil trading at BP , moved with his team to Brightoil in 2010.
In the two years at Brightoil, Quek and his fuel oil team dominated the fuel oil derivatives market in Singapore, trading a total volume of 17.27 million tonnes in the year to June 2012, more than double that of its nearest rival BP at 8.72 million tonnes.
Brightoil also became the second-largest bunker supplier by volume in Singapore in 2011, according to the Maritime Port Authority of Singapore. But its profits fell, with some analysts saying the company’s expansion moves came too quickly.