Jacques-Olivier Thomann
Honorary President
Geneva Trading and Shipping Association (GTSA)
Role of Switzerland as a hub for commodity trading and finance
What Switzerland can bring to Arab financial institutions and
commodity houses ?
Trends and Developments
Jacques-Olivier Thomann
Board member Geneva Financial Center
Geneva April, 3rd 2014
Honorary President GTSA
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Role of Switzerland as a hub for commodity trading and finance
A unique positioning with a true cluster effect
No other international centre can match Switzerland for the strong positions it
holds across all key areas of the commodities sector
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Commodity trading companies
Trade finance Banks
Ship chartering
Legal
Inspection and certification
Commodity sectorial Associations
 10,000 jobs relating to the sector
 Over 400 companies
 3,5% + of GDP
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Geneva Trading and Shipping Association
Founded in 2006, GTSA regroup the commodity sector players: Trade Finance Banks, commodity traders,
shipping companies, brokers, security and inspection companies
Zug Commodity Association
Lugano Commodity Trading Association
and soon a SWISS COMMODITY TRADING FEDERATION
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The Lake Geneva Region, the centre for commodity trading
Key dates
Players in the sector
First
Second
World World War First oil
War
crisis
1950
International
organisations
1973
Trading companies
Collapse of
Soviet
Union
1990
Egyptian End
cotton
of the oil
producers majors’
monopoly
2000
• Several hundred billion in combined revenue
• Approx. 400 companies including Cargill, Mercuria, Vitol, Trafigura,
Louis Dreyfus, Totsa,Bunge, Addax, Gunvor, Metinvest, Sucafina …
2010
CIS
International traders
trading
companies
Banks
• Aprox. 15 including BNPP, Crédit Agricole, ING, Société Générale,
Credit Suisse, UBS, the cantonal banks, Arab Bank, National Bank of
Abu Dhabi,BCP…
Shipping companies
• Over 1,200 million tonnes of commodities shipped
• MSC, Geogas, Promar, Riverlake...
Certification and inspection companies
SGS, Cotecna….
Service companies
• Lawyers, insurance brokers, auditors...
Positioning
Association : Geneva Trading and Shipping Association, GTSA
University : Master, Diploma, ++
Positive momentum
Oil:
• Number 1 : 35% of world oil traded
• 75% of ex-USSR exports
Following the financial crisis
• Traders: 10% of global exports
• Banks: 60% of exports
The commodities sector is part of the real economy
Steel
Soft commodities
• Number 1: cereals and vegetable oils 35%, coffee 50%, sugar
50%, cotton, cocoa
• 60% of Russian and Ukrainian exports
Inspection and Certification : Worldwide leader
• Very pragmatic financings
• Secured financing of real and physical goods
• Ensures logistics for and movements of commodities
• Ensures that markets are well supplied with strategic products
• Contributes to the development of the emerging markets
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What Switzerland can bring to Arab financial institutions and
commodity houses ?
Trends and Developments
With an extremely restrictive regulatory framework : Basel III……..
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Liquidity ratio: liquidity coverage ratio (LCR)
Funding ratio: net stable funding ratio (NSFR)
Capital ratio: leverage ratio (LR)  from 4% to 7%, 9% and above
…..and political uncertainties in a debt crisis environment
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Fall in USD money market funds cheap liquidity
"Nationalist" pressures
 European banks must take exceptional measures
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Deleveraging their balance sheets and improve their ratios
Downsizing their USD funding requirement
Looking for alternative sources of funding
This situation creates a particularly favourable environment for investors,
innovative banks and trading companies, indeed
Commodity Trade financing structures will be moving to non-banking type of
facilities such as
• Trade finance funds
• CLO’s
• Securitisations
These investment models are
generating
with a
uncorrelated to traditional asset classes,
good return to investors
wide range of risk profile
Thank you for your attention
Jacques-Olivier Thomann