LONDON (Reuters) – U.S. bank Citigroup (C.N ) has launched a commodity trade finance unit, expanding into a sector once dominated by European lenders who have been shrinking their activities to cope with the euro zone debt crisis.
Citigroup has hired Kris Van Broekhoven from Deutsche Bank (DBKGn.DE ) to lead the new unit, part of its transaction services business, a spokesman said on Thursday.
The bank also said it has hired two bankers from BNP Paribas (BNPP.PA ) to work in its commodities business – in which it buys and sells anything from energy to grain on behalf of clients.
It has hired Jose Cogolludo as global head of commodity sales, the bank said. He was formerly a senior commodity banker at BNP. Fasil Nasim, who was head of European energy sales at BNP, will also move to Citi, with the same function.
U.S. banks have been expanding fast in commodities trade finance, as French banks such as BNP Paribas and Societe Generale (SOGN.PA ) retreat.
The likes of Citi, JP Morgan (JPM.N ) and Merrill Lynch (BAC.N ) have been expanding their commodities trade finance portfolio for oil, coal, steel and iron ore.
Previously, the bank had only financed commodity trades occasionally, the spokesman said.
Citigroup chief executive Vikram Pandit singled out trade finance as one of the brighter spots for the bank, saying earlier this year Citi was increasing revenue for transaction services for corporations to record levels.
Trade loans were up 53 percent at the end of June from a year earlier, according to the company.
(Additional reporting by Bill Berkrot and David Henry in New York- Editing by Dan Lalor)