UBS AG, Switzerland’s largest bank, is slowing down its commodities hiring expansion after a decade-long bull market drove up pay and created a scarcity of talent. UBS originally wanted to double its commodities staff. Salaries and bonuses for the most-profitable metals traders rose 20% to $2 million to $3 million last year, according to Commodity Search Partners.
The Standard & Poor’s GSCI index of 24 raw materials rose fourfold since the end of 2001 and the surge drove commodity investments to a record $451bn in April this year, about 50% more than a year earlier. A report by banking researcher Coalition showed a group of 10 large banks increase their commodities revenues by 55% in the first quarter.
Hellenic Shipping News reports:
UBS, which employs about 65,000 people worldwide, said in December it will handle trading in agriculture, industrial metals and oil and gas for clients. It will also trade energy derivatives and continue to operate commodity indexes and a precious-metals business.
The Wall Street Journal also reported on the boom experienced by commodities trading desks:
A group of 10 large banks saw their commodities revenues increase by 55% in the first quarter, according to Coalition, a firm that analyzes the performance of investment banks. After a disappointing 2010, commodities was the fastest-growing segment in banks’ fixed-income businesses in the first three months of this year.