Standard Chartered Closes #Geneva #Commodities Office Amid Oil Rout

Move leaves bank without a physical presence in city home to the world's largest oil & commodity traders.

Commodity desk set to be moved to London.

Bloomberg reports:

Standard Chartered Closes Geneva Commodity Office Amid Oil Rout

Standard Chartered Plc is closing its office in Geneva, the global center of the commodity-trading industry, in Chief Executive Officer Bill Winters's latest move to slash the lender's exposure to the oil, gas and agricultural industries.

While the bank says commodities trading and agribusiness, or CTA, will continue to be a "core activity," it will be transferred to London as "a consequence of our decision to reduce our overall exposure to commodity-related clients," the bank said in a statement in response to questions. Closing the Geneva office, which opened in 2007, "marks the end of Standard Chartered's client coverage from Switzerland," it said.

The move leaves Standard Chartered without a physical presence in a city home to the world's largest oil traders, including Vitol Group and Mercuria Energy Group Ltd. Traders accounted for $20 billion of Standard Chartered's $40 billion commodity exposure last year, down from $33 billion during 2014, according to its annual report.

Plunging Oil

Winters is undertaking a root-and-branch overhaul of the struggling firm, which made its first annual loss in more than a quarter of a century last year. The CEO had to raise $5.1 billion of capital to shore up its balance sheet amid spiraling losses from loans made during the commodity boom, and has also replaced its entire senior management team while pledging to cut 15,000 jobs and restructure or ditch about $100 billion of assets.

Since mid-2014, the lender has reduced its exposure to commodities by about a third, company filings show, as the price of oil plunged by more than 50 percent from more than $100 a barrel to less than $40. It had $20.4 billion of total exposure to traders at the end of last year, about 8 percent of its $261 billion of loans.

"The key risk for traders, which are less directly affected by price changes, is lack of liquidity and their risk-management practices," the bank said in its annual report. Loan impairments almost doubled to $4 billion in 2015, the highest ever.

While oil and gas accounts for the lion's share of Standard Chartered's natural resource exposure, Winters's review has drilled down as far as its tiny $2 billion diamond portfolio, where he's demanding that borrowers find insurance, provide collateral or repay their debts.

Yes, but "On the other hand, the front office is an area where Sutton believed that human interaction is necessary as finance is an industry that is very relationship centric as people leverage financial advisors and wealth managers to provide customised advice."

This from Bobsguide.com 

Will Artificial Intelligence have an Uber Effect on Finance?

Following the recent breakthrough of artificial intelligence (AI), many have been wondering how this form of technology can be implemented in the financial services. As newer products emerge, it questions how popular the traditional legacy financial institutions will remain or perhaps, fintech startups will gain an increased number of customers, in a similar way to how Uber affected the taxi industry. bobsguide spoke to Josh Sutton, global head of artificial intelligence practice at technology company Sapient about how AI is set to transform business and finance, alongside how banks are already implementing a technology that has been around for 30+ years, but its true potential hasn't been seen until now.

According to CNBC, nearly $700 million has been invested in artificial intelligence over the past two years

Will Artificial Intelligence have an Uber Effect on Finance? - bobsguide.com

Shark-Cage Diving Out, Austerity In for Global #Mining Chiefs #Indaba

For two decades, Africa’s biggest mining conference has brought thousands of the industry’s top executives for deal-making, golfing and galas. This year, there’s little to celebrate.

Shark-Cage Diving Out, Austerity In for Global Mining Chiefs

For two decades, Africa’s biggest mining conference has brought thousands of the industry’s top executives for deal-making, golfing and galas. This year, there’s little to celebrate.

With many miners battling to stay afloat, fewer are willing to shell out 1,140 pounds ($1,641) for the Investing in African Mining Indaba conference in South Africa and business-class airfare. Attendance is expected to be 6,000, about 15 percent less than the record in 2013.

Canadian brokerage GMP Securities Ltd.’s annual Mining Jamboree, which offered activities including shark-cage diving, golfing and wine tasting along with industry meetings, was canceled after the commodities collapse forced spending cuts.

Even though the mood is more sober, the event next week is still among the most influential in mining and will feature speeches by executives including Anglo American Plc Chief Executive Officer Mark Cutifani. One item likely to be on the agenda: deals. The $1.4 trillion collapse in mining stocks since 2011 is poised to reshape the industry as companies struggle with billions of debt and years of sliding commodity prices.

“Some of the larger corporations are going to send fewer delegates," Jonathan Moore, managing director of the conference, said by phone. For mining companies with “not a lot of money to put to work towards events, this is probably the one that you’re going to make sure stays on the calendar."

“The deal-making that takes place here makes this a unique event,” he said.

Companies like Rio Tinto Group, Glencore Plc and BHP Billiton Ltd. have scaled back their involvement in the Indaba conference from previous years as the industry aggressively tries to rein in costs. All three companies have seen their value cut in half over the past year as China’s deepening economic slowdown sent metal prices tumbling.

With balance sheets under strain, most of the biggest mining companies have said in recent months they’re looking to sell assets. The value of completed transactions across mining and steel fell to about $54 billion last year, from $98 billion the year before, according to data compiled by Bloomberg.

There are 25 delegations from African and non-African governments registered to attend, down from about 45 in recent years, according to Moore, adding that the number could increase with late additions.

There’s more investor interest in mining than last year, but they’re still reluctant to put money into the industry, he said.

“They are keen to have a discussion and understand from producing companies: how will the current environment impact them, how will they weather the storm, what will they look like when they come out the other side,” Moore said.

Before it's here, it's on the Bloomberg Terminal.

Shark-Cage Diving Out, Austerity In for Global Mining Chiefs

Are more #HedgeFunds going to become #FamilyOffices?

We think you know the answer...This from Family Capital 

Are more hedge funds going to become family offices - yes

Hedge funds aren’t doing well in terms of performance - that will just increase the number of family offices.

A recent report
by Citi, a US bank, on the global hedge fund industry found that assets
in the sector fell in August this year by $78.4 billion, the biggest
fall since October 2008 when the financial crisis was at its most
potent. Hedge funds, set up originally to “hedge” against falling
markets, don’t seem to like volatile markets like the ones of the last
few months. But maybe there is something more fundamental happening.

Because
bad performance, coupled with regulatory pressures, will likely see
more hedge funds turn themselves into family offices, as they seek
refuge in family-only investments, where regulatory and client pressures
are pretty much absent.

The latest hedge fund manager to convert
his fund into a family office is John Brynjolfsson, the chief investment
officer of Armored Wolf, a California based hedge fund. Brynjolfsson
said he is closing his hedge fund to outside investors and converting it
into a family office to manage his own money.

In an interview with Bloomberg,
Brynjolfsson added that he was looking forward to a sabbatical and that
the five-year bear market in commodities had made the decision easier.
Numerous hedge funds managers have already converted their funds into
family offices; notable investors who’ve made the move include George
Soros, Carl Icahn,  John Thaler and Stanley Druckenmiller.

As Family Capital reported
recently, a number of other hedge fund managers might not have quit
their day jobs running hedge funds but have set up family offices.  This
has led to some questions about a possible conflict of interest in
terms of the advice they’re giving their hedge funds clients and what
they’re investing in at their  family office. The US Securities and
Exchange Commission seems to be aware of the problems and may crackdown
soon, say people close to the regulator.

Given performance
pressures and potential regulatory difficulties more hedge fund managers
may also be thinking about following the herd and moving all their
investments into their family office - and saying goodbye to the
wonderful world of hedge funds.

Are more hedge funds going to become family offices - yes — Family Capital

Bank of China looking to set up a Trade & Commodity Finance operation in Geneva Agefi.com

Wang Min, responsible for international trade services at Bank of China, said they are looking to set up once more in Geneva.  Read the whole article on the Agefi.com website - in French.

Les synergies sino-suisses | Agefi.com