Australia and New Zealand Banking Group is considering expanding its physical commodity trading business as it aims to step into the gap left by the retreat of big Wall Street and European banks, a bank source with direct knowledge of the matter said.
Australia’s No.3 lender is set to put a proposal to launch a physical commodities trading desk to its risk committee and board in July, the source told Reuters.
ANZ is looking to take advantage of its strong balance sheet and a lighter regulatory burden on Australian banks compared to rivals operating in the United States.
The plan to expand physical commodities trading beyond just gold and silver comes as major global banks are scaling back the business because of rising capital requirements, regulatory scrutiny and weak margins.
JPMorgan Chase & Co and Morgan Stanley have sold off large parts of their physical trading businesses, while Barclays PLC and Deutsche Bank AG are quitting the commodity markets altogether.
“With the exit of big U.S banks from the business of physical commodity trading, we see an opportunity to get into that business,” the source, who did not want to be identified as the matter is not public yet, told Reuters.
Unlike ANZ’s current gold and silver trading, the proposal is for the bank to operate in all aspects of the supply chain, from sourcing to warehousing and freight contracts. It is not clear which commodities it will trade.