Goldman Overtakes JPMorgan in Commodities After Mercuria Sale 

Goldman Sachs Group Inc. earned back its place as the largest bank by commodities revenue after JPMorgan Chase & Co. sold its physical raw-materials business.

JPMorgan, which made the most money from commodities among the top 10 investment banks in 2013, ranked second last year and Morgan Stanley was third, according to a report published Friday from Coalition, a London-based business analytics firm. JPMorgan sold part of its physical commodities business to trading house Mercuria Energy Group Ltd. last year.

JPMorgan, Barclays Plc, Deutsche Bank AG and Morgan Stanley have withdrawn from or scaled back physical commodity operations amid regulatory scrutiny and pressure from lawmakers. The Bloomberg Commodity Index of 22 raw materials slumped 17 percent in 2014, a fourth annual drop, as energy prices plunged.

Increased activity in energy markets helped the largest banks earn more money in commodities last year, boosting revenue by 9 percent to $4.9 billion, Coalition said in February.

JPMorgan continues to provide services and products linked to commodities, including financing and brokerage. It tied for first place with Citigroup Inc. in revenue from fixed income, currencies and commodities, Coalition said. Deutsche Bank was third.

Federal Reserve Governor Daniel Tarullo questioned this month whether Goldman Sachs and Morgan Stanley should be allowed to own physical commodities because the practice exposes them to risks outside traditional banking.

Morgan Stanley has sought bids for its oil-merchanting unit after failing to win U.S. regulatory approval last year to sell it to Russia’s OAO Rosneft. Goldman Sachs sold its metals warehousing unit in 2014 amid allegations by a U.S. Senate panel that it influenced aluminum prices by constraining supplies in storage.

Source: Bloomberg – Goldman Overtakes JPMorgan in Commodities After Mercuria Sale

---