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Commodities

Commodities broker Marex looks to strike gold as banks exit

(Reuters) - Commodities brokerage Marex Spectron Group Ltd expects to attract clients looking for alternatives as more banks cut their exposure to commodities trading, Chief Executive Ian Lowitt told Reuters.

Banks are cutting back on commodities trading as part of efforts to focus on more profitable businesses and those that require less capital.

Commodities-related revenue at the 12 biggest investment banks tumbled 40 percent in the first three months of the year, financial industry analytics firm Coalition said on Tuesday.

“Some of the really big-name clients who previously would just deal with banks are now calling us and engaging with us,” Lowitt said in an interview from London.

The company, which describes itself as one of the largest privately held commodities brokerages in the world, declined to name any of the potential customers.

Lowitt, the last chief financial officer of Lehman Brothers before its 2008 collapse, also expects to hire between 10 and 30 employees across all divisions this year.

“As banks and other financial players pull away, talent is coming onto the market. That puts us in a position that we can hire some people that previously probably wouldn’t have come to firms like ours,” said Lowitt, who joined in July 2012 as chief financial officer and became CEO this January.

Marex, which brokers trades in energy, metals, and agricultural products, currently employs about 600 people globally.

While prices of commodities such as oil and copper have rallied in recent months, they are still far below their 2014 levels.

Apart from banks, Marex’s rivals include ICAP Plc and Mitsubishi Corp unit Triland Metals Ltd.

The company’s privately owned competitors include Sucden Financial Ltd and Amalgamated Metal Trading Ltd. Marex has offices in London, New York and Hong Kong. This week, the company reported 2015 operating profit of $23 million, a 53 percent jump from a year earlier.

Reporting by Mamidipudi Soumithri in Bengaluru; Editing by Sriraj Kalluvila

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