LONDON: Wells Fargo Securities will open a metals desk in London in a push into the sector as other larger players have bowed out due to regulatory pressures and thinning margins, sources said.
The US bank, which already trades base metals from New York, will open the metals desk in London in the next few weeks. It has hired Michael Cuoco, previously with Swiss bank Credit Suisse, to head the metals business in Europe, the Middle East and Africa.
At Credit Suisse Cuoco was mainly involved in base and precious metals but also focused on iron ore, dry freight, coal and minor metals.
"Wells Fargo Securities continues to develop its platform in Europe to meet the financial needs of our clients," the bank said after confirming the new hire in London.
Wells Fargo has applied for Category 2 membership of the London Metal Exchange, giving it electronic and telephone trading rights, but not open-outcry "ring" trading, the sources added.
Other banks and brokers have retreated from metals trading due to tougher regulation and falling profitability after a plunge in commodities prices.
Credit Suisse, Deutsche Bank, JP Morgan and Barclays are among those to have exited or significantly downsized their activities in commodities.
Wells Fargo, grew its metals business by hiring Janet Mirasola from Chicago-based brokerage RJ O'Brien & Associates in 2013 as a managing director. In 2014 the bank took on Randy North and Annie Yung to its metals team and hired Eric Milhoua and Daniel Raab to develop its commodity index business.
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