Citi Builds Commodity Trade Finance as Others Retreat

Posted by Eric Haun
Friday, May 16, 2014

Citigroup plans to double its commodities trade finance team within the next three years as it seeks to benefit from a retreat by some rival banks, the head of the business said.

Citigroup is one of the biggest players in trade finance but has been relatively small in the specific area of commodities trading. It started building a commodities trade finance team to focus on the sector in 2012.

Trade finance is a form of short-term lending or guarantee that ensures payment is made on an international shipment of goods.

Kris Van Broekhoven, global head of commodities trade finance at Citi, told Reuters he hoped to double the team's 14-strong headcount within three years and become a top five player.

"We started in energy in 2012, expanded into metals and minerals in 2013 and plan to move into agricultural commodities by the end of 2014," he added.

The bank aims to capitalise as rivals such as Morgan Stanley and JP Morgan withdraw from the business of trading physical assets such as cargoes of crude oil or metals.

"They are selling these platforms or exiting the business. Trading platforms are being picked up by producers, private equity and trading houses," Van Broekhoven said.

JP Morgan has agreed to sell its commodities trading operation to Swiss-based commodities trading house Mercuria, while Morgan Stanley has sold its business to Russian oil major Rosneft.

When these trading operations were part of investment banks, the traders could easily rely on their own banks to provide trade financing.

"But when they move, their funding changes, and they turn to the commodity trade finance banks to fund them, so that creates an expanded market for us," Van Broekhoven said.

(By Simon Falus; additional reporting by Charles Staples; editing by Jane Baird)

Maritime Reporter March 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Carnival Sails to Profit

The world's largest cruise company Miami-based Carnival Corp reported a net profit of $49 million, or 6 cents per share in the first quarter ended Feb. 28.   That

Ukraine Arrests Turkish Ship for Visiting Crimean Port

Turkey owned merchant ship flying the flag of Tuvalu was arrested by Ukrainian authorities over a visit it made to a port in Crimea, reports Reuters. The ship's captain detained.

USCG Flush Ice down River Systems to Facilitate Shipping

The Coast Guard cutter fleet is flushing ice through the Great Lakes river systems to prevent ice jams and facilitate commercial shipping as the shipping season

Finance

JV Wins $2bln Freeport LNG Contract in US

A joint venture (JV) between CB&I, Chiyoda International and Zachry Industrial has won a contract worth over $2bn from FLNG Liquefaction 3 for a liquefied natural

Puerto Rico Readies for Largest Cruise Ships

Thanks to a pier expansion and enhancement, Puerto Rico will welcome the two largest cruise ships in the world, Royal Caribbean International’s Oasis of the Seas and Allure of the Seas, in 2016.

Carnival Sails to Profit

The world's largest cruise company Miami-based Carnival Corp reported a net profit of $49 million, or 6 cents per share in the first quarter ended Feb. 28.   That

Energy

Feds Delay LNG’s Port Ambrose Application

The US Coast Guard and the US Maritime Administration (MARAD) have temporarily suspended their review of the proposed Port Ambrose deep-water LNG import terminal.

Austal Graduates 48 4-Yr Apprentices

Austal USA combined two classes to graduate a total of 48 members of Austal’s cutting-edge four-year apprenticeship program yesterday at a formal ceremony held at the Arthur R.

Mexico Unveils National Strategy ahead of Paris Climate Talks

Mexico on Friday said it will cap its greenhouse gas emissions by 2026, becoming one of the first countries to formally submit its national climate plan the

News

Is China Building a Naval Base in Africa?

Recently, The Namibian reported the existence of a "confidential letter from Namibia's ambassador to China, Ringo Abed, to Namibia's foreign minister stating that

JV Wins $2bln Freeport LNG Contract in US

A joint venture (JV) between CB&I, Chiyoda International and Zachry Industrial has won a contract worth over $2bn from FLNG Liquefaction 3 for a liquefied natural

Puerto Rico Readies for Largest Cruise Ships

Thanks to a pier expansion and enhancement, Puerto Rico will welcome the two largest cruise ships in the world, Royal Caribbean International’s Oasis of the Seas and Allure of the Seas, in 2016.

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Offshore Oil Salvage Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1605 sec (6 req/sec)