Natixis plans to shut commodities brokerage unit
By Josephine Mason and Sybille de La Hamaide
NEW YORK/PARIS (Reuters) - French bank Natixis (CNAT.PA: Quote) said it plans to close its commodities brokerage division, as one of the oldest ring-dealing members of the London Metal Exchange becomes the latest victim of the European debt crisis.
The bank decided to wind up the brokerage activities of Natixis Commodities Markets (NCM), which offers derivatives on a range of metals, fuels and commodities, the bank said.
Over-the-counter activities will continue and operate in cooperation with the bank's structured finance operations, which also offer, among other related activities, commodities trade finance.
"This is part of our reduction plan because it is a business which consumes a lot of liquidity," Natixis CEO Laurent Mignon told analysts in a conference call on Thursday.
"We consider that we really don't have the critical size in this business," he added.
The future of NCM, which has been in metals broking under several owners for almost 35 years, had been uncertain since management said in January it was considering selling the unit.
The bank wanted to scale back its exposure to the capital-intensive commodities business. Henrik Wareborn was hired in September to head up the operation.
The 120-strong team in London was told by management of the decision to wind down the brokerage on Wednesday afternoon, a trader who had spoken to an NCM trader told Reuters. Continued...