Ex-BNP Bankers Aim to Bridge Commodity Trade Finance Gap

Jacques Begle and Philippe Steiner, formerly of BNP Paribas (Suisse) SA, are starting a company to help bridge a gap in loans for smaller commodity merchants after banks stepped up lending rules.

Geneva-based Commodity Trade Invest LLC will structure trade finance deals for Swiss funds, individual investors and trading companies, said Begle, former co-head of trade finance at BNP. It will target borrowers with revenues of $50 million to $500 million and will focus on coal, metals and oil products from the Commonwealth of Independent States, he said.

“There seems to be quite a lot of interest from both sides,” Begle said in a telephone interview yesterday. “The deals are here. Our main job now is to find investors, willing to give us a mandate to structure deals for their account.”

Loans to commodity companies declined 23 percent last year, data compiled by Bloomberg show. Lenders are yet to fill the funding gap for smaller commodity merchants after French banks, which traditionally dominated in trade finance, pulled back, according to Bank of Tokyo Mitsubishi UFG.

Junior traders are struggling to get financing after banks stepped up lending requirements to meet Basel III rules, Begle said. The rules set by the Basel Committee on Banking Supervision more than triple the core reserves that lenders must hold against insolvency, and set minimum liquidity standards.

Begle, who left BNP in November after 30 years at the bank, said CTI will help find investors for standalone transactions of $2 million to $50 million. Returns for investors would be 4 percent to 15 percent a year, he said. Steiner was previously a relationship manager for commodity finance at BNP.

Before it's here, it's on the Bloomberg Terminal.