Wall Street's biggest commodities trader JPMorgan Chase & co. announced its plan to sell physical trading operations and abandon the business after months of increasing pressure.
JPMorgan Chase & Co., the second largest bank in the U.S. by assets, is an American multinational holding company that specialises in providing banking and financial services.
The bank has expanded aggressively into the physical trading markets since 2009, starting with its 2008 purchase of Bear Stearn and 2010 deal to buy RBS Sempra's global metals and oil business for US$1.7 billion.
In March 2008, JPMorgan purchased Bear Stearns and subsidiary Bear Energy which generated several trading deals with power plants and wind farms across the U.S. However, the bank exited the California power market and sold power assets amounting to over 3,000 MV to Edison International after it become involved in a market manipulation scandal.
RBS Sempra, the second-largest warehousing company listed in the LME, had a portfolio of almost 100 warehouses when JPMorgan acquired it for US$1.6 billion back in 2010. JPMorgan acquired metals warehousing business Henry Bath along with the deal. Later the Federal Reserve required RBS Sempre to divest the asset within two years of its 2008 joint venture launching and JPMorgan was believed to have been told the same.
Further information on the banks's plans remains unconfirmed.
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