December 19, 2019 / 1:20 PM / a month ago

BNP Paribas to overhaul commodity finance team

LONDON/PARIS, Dec 19 (Reuters) - France’s BNP Paribas could move 75 commodity finance jobs from Paris to Geneva as part of a plan to consolidate its Europe, Middle East and Africa specialised trade solutions team, according to sources with knowledge of the matter.

Commodity finance divisions at banks have been under pressure across the board as weak oil prices weighed on profits, while price volatility last year hurt major trading clients.

Smaller players cut desks, shut down or merged with others amidst thinning margins.

BNP Paribas’ commodity finance division has struggled to be profitable since its operations were cut back following a $8.9 billion fine for violating U.S. sanctions in 2014, industry sources said.

Since then, it has ended its relationship with major global trading firms such as Trafigura to focus on small and mid-sized ones, sources familiar with the matter said.

“The problem is that small traders are less profitable but the infrastructure needs and time spent on them is still high,” one of the sources said.

Further, the team has lost money on several transactions this year, two sources said.

“The business is not put to question, we are maintaining our offer to the group’s clients,” a spokeswoman for BNP Paribas said.

As part of the reorganisation, about 75 jobs would be moved to Geneva from Paris, one of the sources with direct knowledge said.

BNP said there would be no redundancies in Paris, but that employees would be given the opportunity to move within the group.

“This project has been submitted to the staff representative bodies. There are no redundancies, but a mobility plan,” the spokeswoman said.

At the end of November, BNP said it was considering laying off 250 employees out of around 1,400 in Switzerland, blaming “major challenges” in the Swiss financial environment and part of a wider transformation.

An industry source said around 50 of those jobs were from trade commodity finance. BNP Paribas declined to comment.

Earlier this year, BNP Paribas cut its profitability target for 2020 and announced cost cuts in corporate and investment banking. (Reporting By Julia Payne and Maya Nikolaeva; Editing by Jan Harvey)

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