Citibank (NYSE: C, which trades up to one-fifth of all freight derivatives, has hired a director from a London shipbroker to develop its physical shipping operations as the bank hopes to expand its global commodities business.
Alistair McLuskie, who was previously a director with Simpson, Spence & Young Ltd, the world’s second largest shipbroker, will join the bank and serve as the director of physical freight beginning in April, according to a statement made by Citibank. McLuskie will report to Boudewijn van Vilet, head of freight for the company.
Last week, Citibank said that it plans to increase its workforce in the commodities business by as much as 40% over the next three years. The move will help solidify the bank’s position in the commodities business as its competitors in the commodities business, including Morgan Stanley, Goldman Sachs and JP Morgan Chase hope to boost their share of the commodities markets.
Citibank is responsible for between 15% and 20% of trading on freight derivatives, said Van Vilet. Operating ships will also help improve Citibank’s knowledge of the freight market, helping its derivatives trading efforts.
“We see the need to be able to offer risk management on the physical side to customers who have physical freight exposure, as they produce and sell commodities around the world,” he said.
