Sberbank Forms Swiss Entity for Physical Commodities Trading

Denis Lunin has named the CEO of the new entity.

Sberbank, a state-owned Russian bank, has announced on Friday its expansion into the commodities market with the opening of a trading company in Switzerland.

The Zug-based entity, named Sber Trading Swiss AG, will become the main hub of the Russian bank for handling all international physical commodities trading.

“By opening our own International trading company we have moved to a new level in physical commodity trading,” Anatoly Popov, deputy chairman of the executive board at Sberbank, said.

“We expect Sber Trading Swiss AG to strengthen our position as one of the largest providers of solutions for our clients in international and local commodity trading, structural financing, and strategic hedging.”

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Expanding presence in the physical commodities business

The primary aim of the new entity is to build on existing customer relationships between Sberbank and commodity producers and consumers in Russia and the CIS, thus helping its parent to scale up and diversify its presence in the physical commodities market.

The Swiss entity will focus on international physical commodity trading in oil and oil products, coal, base metals, bulk, and agriculture products, the bank specified.

Notably, Sberbank already has two commodities-specific entity – PAO Sberbank for facilitating physical commodity trading in precious metals, and OOO SB Commodities Trading, a local physical trading house.

Sber Trading Swiss will offer international purchase and sale of physical commodities, including storage, transportation, and distribution, commodity financing through prepayment and deferred payment structures, and monetization of reserves (Commodity REPO) for oil and crude oil products, base metals, bulk and agricultural products.

“The company will focus on international trading in oil and oil products, coal, base metals, bulk, and agricultural products. We are planning to work primarily with the Sberbank clients, producers and consumers of raw materials in Russia and the CIS countries, and expect the first transactions to be conducted in the third quarter of this year,” Popov added.