Bank of China International Makes Cuts to Commodities Unit

Yahoo

06-03-2025

(Bloomberg) -- Bank of China International Holdings Ltd., the investment banking arm of the giant Chinese state-owned lender, is pulling back from commodities after wild price moves over the past few years shook management confidence in the sector.
Republican Mayor Braces for Tariffs: 'We Didn't Budget for This'
Trump Administration Plans to Eliminate Dozens of Housing Offices
How Upzoning in Cambridge Broke the YIMBY Mold
NYC's Finances Are Sinking With Gauge Falling to 11-Year Low
Remembering the Landscape Architect Who Embraced the City
The bank has reduced the number of clients in its commodities business by more than two-thirds, and in recent weeks has made lay-offs in its commodities team in Shanghai and Beijing, according to people familiar with the matter. It's been reviewing the unit since last year, the people said, asking not to be named as the matter isn't public.
Through BOCI, Bank of China Ltd. had been one of the first movers among Chinese lenders seeking to challenge global investment banks like JPMorgan Chase & Co. and Macquarie Group Ltd. in the international commodity markets. The business has offices in London, New York, Singapore and Shanghai.
BOCI was, in 2012, the first Chinese company to become a member of the London Metal Exchange. It was also the first Chinese institution to obtain clearing membership of the Chicago Mercantile Exchange and the Intercontinental Exchange, two other major commodity bourses.
Still, the bank's support for the commodities arm has been shaken by several extreme price moves in the past few years. BOCI was among the banks and brokers through which Tsingshan Holding Group Co. held the vast nickel position that was the focus of a massive short squeeze in 2022, Bloomberg reported at the time. And then last year, a divergence in copper prices between New York and London once again highlighted the risks in the sector.
The bank has reduced its exposure in particular to metals clients, the people said, while maintaining relationships with big Chinese state energy firms. It comes after other big financiers of the Chinese metals industry, like JPMorgan and ICBC Standard Bank Plc, pulled back from the sector in recent years.
The changes aren't likely to affect parent company Bank of China's trade-finance lending business, which participates in big-ticket credit facilities for commodity traders around the world, people familiar said.
The review of the division followed the departure of Li Tong as chief executive officer of BOCI last year. The well-connected daughter of a former member of the politburo, Li had been a key driver of the bank's growth in commodities, and her move to Bank of China's Hong Kong unit last year has left the commodities business with less support among the senior management, the people said.
An inquiry to a representative for parent company Bank of China wasn't answered.
--With assistance from Archie Hunter, Jack Farchy and Amanda Wang.
(Adds details on the commodities business in paragraphs three and four.)
The Mysterious Billionaire Behind the World's Most Popular Vapes
Rich People Are Firing a Cash Cannon at the US Economy—But at What Cost?
Greenland Voters Weigh Their Election's Most Important Issue: Trump
Trump's SALT Tax Promise Hinges on an Obscure Loophole
Snack Makers Are Removing Fake Colors From Processed Foods
©2025 Bloomberg L.P.