SocGen Is Latest Bank to Shutter Its Commodities Business
(Bloomberg) -- Add Societe Generale SA to the list of banks and financial institutions to take a big step back from commodities amid a slump in trading profits.
The French bank said on Tuesday that it is planning to close its over-the-counter commodities business and its proprietary trading subsidiary as part of a global move to cut about 1,600 jobs after a slump in trading revenue. The bank will also reorganize and refocus activities within fixed income and prime services to make them more profitable.
The move comes just months after BNP Paribas shuttered its U.S. commodities derivatives desk as France’s largest bank sought to protect profitability.
The commodities business has seen a broad retreat from Wall Street and other financial firms in recent years after increased financial regulations and lackluster profits. Other exits include:
- Barclays Plc, Deutsche Bank AG and Credit Suisse Group AG have exited energy trading in recent years
- Hedge funds Jamison Capital Partners LP, Brenham Capital Management LP and Precocity Capital LP have shut this year and last year
- Koch Supply & Trading LP pulled back from over-the-counter energy derivatives market-making to focus on proprietary trading
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