On Thursday, Albert Steiger, director of Swiss bank UBS, stated that the bank is surging in commodity trade finance. They are employing 10 bankers in Geneva to stop economizing its own investment banking.
The Zurich-based bank's efforts in retracting from fixed income in October, made it release 10,000 staff. Its move was in accordance to the stricter capital rules which hinders the process of earning from activities like trading. However, its low-risk, low-return industry of short-term credit to commodity dealers is significantly expanding.
As proposed by Swiss Bankers Association, the newly hired bankers who will be based in Switzerland will constitute about 1.5 trillion Swiss Francs ($1.59 trillion) of the volume in commodity trade economics.
"UBS has decided to downgrade its investment banking and that gives the opportunity to our department and we have been hiring a lot of people," Steiger said.
He further articulated on allocating funds to commodities lending with Reuters, "It's less capital intensive and the loans are short term. We have a management commitment to increase our activity."
Finally, a representative of the bank stated that the deep cuts they made in investment banking and the development in the business of commodity trade were relevantly distinct.
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