* Citi to move into agricultural trade finance this year
* Exit of JP Morgan, Morgan Stanley provides opportunities
* Team to double from 14 within 3 years, aims for top 5 spot
By Simon Falush
LONDON, May 16 (Reuters) - Citigroup plans to double
its commodities trade finance team within the next three years
as it seeks to benefit from a retreat by some rival banks, the
head of the business said.
Citigroup is one of the biggest players in trade finance but
has been relatively small in the specific area of commodities
trading. It started building a commodities trade finance team to
focus on the sector in 2012.
Trade finance is a form of short-term lending or guarantee
that ensures payment is made on an international shipment of
Kris Van Broekhoven, global head of commodities trade
finance at Citi, told Reuters he hoped to double the team's
14-strong headcount within three years and become a top five
"We started in energy in 2012, expanded into metals and
minerals in 2013 and plan to move into agricultural commodities
by the end of 2014," he added.
The bank aims to capitalise as rivals such as Morgan Stanley
and JP Morgan withdraw from the business of
trading physical assets such as cargoes of crude oil or metals.
"They are selling these platforms or exiting the business.
Trading platforms are being picked up by producers, private
equity and trading houses," Van Broekhoven said.
JP Morgan has agreed to sell its commodities trading
operation to Swiss-based commodities trading house Mercuria,
while Morgan Stanley has sold its business to Russian oil major
When these trading operations were part of investment banks,
the traders could easily rely on their own banks to provide
"But when they move, their funding changes, and they turn to
the commodity trade finance banks to fund them, so that creates
an expanded market for us," Van Broekhoven said.
(additional reporting by Charles Staples; editing by Jane