ABN Amro Group NV, the state-owned Dutch bank that’s expanding overseas, plans to add commodity staff next year in Asia where its trade-finance business is growing as China increases consumption of energy and metals.
The region now accounts for about 25 percent of the 250-strong commodity team, said Jan-Maarten Mulder, global head of commodities. The planned increase in Asia will be toward the high end of single digits in percentage terms, said Jacqueline Chang, head of the Singapore commodities team.
ABN Amro’s plan contrasts with reductions at the world’s 10 largest banks, which collectively pared global commodities staff this year to the lowest level since at least 2009, according to analytics firm Coalition. ABN Amro said in March it’s seeking to boost international operations, including commodity financing, to lower reliance on the Netherlands. China, the largest user of energy and copper, will expand 7.5 percent next year, the median of economists’ forecasts tracked by Bloomberg shows.
“The underlying fundamentals are still pretty strong, driven by demand for raw materials in China or Asia more broadly,” Mulder, who joined the bank this year from Trafigura Beheer BV, said in an interview in Singapore on Dec. 4. “We have had support from the headquarters to grow in a sustainable fashion,” he said, describing commodity finance as a key area.
The bank aimed to double the size of its commodities business in terms of revenue by 2017, and also expand the number of staff, Mulder said on Oct. 7. Its Asian commodity team is based in Hong Kong and Singapore and also handles agriculture, said Chang. The Dutch government said in August that it plans to sell ABN Amro, formed after the collapse of Fortis five years ago, in an initial public offering.
The on-balance-sheet energy, commodities and transportation business totaled 14.3 billion euros ($19.6 billion) as of Sept. 30, according to the bank, citing its so-called exposure at default. That compares with 12.5 billion euros as of Dec. 31, 2012, with growth driven by higher volumes in Asia and the U.S.
Citigroup Inc. plans to hire more commodities salespeople to add revenue, Jose Cogolludo, global head of sales, said in an interview with Bloomberg that was published last week. Grupo BTG Pactual, a Sao Paulo-based investment bank, will start commodities trading in Singapore next year, according to three people with direct knowledge of the matter.
Other banks are scaling back. Deutsche Bank AG said last week it’s cutting about 200 commodities jobs as prices of raw materials head for the first annual loss since the 2008 global recession. Total headcount in commodity units at the 10 largest banks was 2,290 at the end of September, about 4 percent less than the end of 2012, according to London-based Coalition.
The Standard & Poor’s GSCI gauge of 24 commodities retreated 2.6 percent this year, heading for the first annual decline since 2008. Corn, silver, gold, coffee and nickel led the losers.