StanChart sees commodity trading revenue up 30%

Standard Chartered Plc expects to post a 30 per cent year-on-year growth in its commodity trading revenue in 2011 on strong demand from its clients in Asia, Africa and West Asia, a senior company official said on Thursday.

The bank is also looking to expand physical trading in various commodities such as coal, iron ore, palm oil and base metals, Ashish Mittal, the bank’s global head of commodities sales said.

“The commodity business is a huge focus area for the bank,” said Mittal, who noted the bank’s commodity clients had doubled in the past two years.

“Over the past few years, we’ve consistently done an average growth of 30-40 per cent,” he said, adding the business started in 2006.

Standard Chartered, which currently provides hedging services to its clients in precious and base metals, energy and agricultural products, could expand its physical trading to act as a link between its clients — both producers and consumers, he said. “If we finance a mine, we might get an offtake that we may offer to our existing clients,” Mittal said, without giving any timeline for the start of physical trade. “We’re closely looking at iron ore, coal and palm. Base metals are an opportunity, too.”

Source: Business Standard