Jacques-Olivier ThomannHonorary President

Geneva Trading and Shipping Association (GTSA)

Role of Switzerland as a hub for commodity trading and finance What Switzerland can bring to Arab financial institutions and commodity houses ?

Trends and Developments

Jacques-Olivier ThomannBoard member Geneva Financial Center

Honorary President GTSA Geneva April, 3rd 2014

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A unique positioning with a true cluster effect

No other international centre can match Switzerland for the strong positions it holds across all key areas of the commodities sector

Commodity trading companies Trade finance Banks Ship chartering Legal Inspection and certification Commodity sectorial Associations

10,000 jobs relating to the sector Over 400 companies 3,5% + of GDP

Role of Switzerland as a hub for commodity trading and finance

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Geneva Trading and Shipping AssociationFounded in 2006, GTSA regroup the commodity sector players: Trade Finance Banks, commodity traders, shipping companies, brokers, security and inspection companies

Zug Commodity Association

Lugano Commodity Trading Association

and soon a SWISS COMMODITY TRADING FEDERATION

The Lake Geneva Region, the centre for commodity trading

Key dates

Players in the sectorTrading companies

• Several hundred billion in combined revenue• Approx. 400 companies including Cargill, Mercuria, Vitol, Trafigura,

Louis Dreyfus, Totsa,Bunge, Addax, Gunvor, Metinvest, Sucafina …Banks

• Aprox. 15 including BNPP, Crédit Agricole, ING, Société Générale, Credit Suisse, UBS, the cantonal banks, Arab Bank, National Bank of Abu Dhabi,BCP…

Shipping companies • Over 1,200 million tonnes of commodities shipped• MSC, Geogas, Promar, Riverlake...

Certification and inspection companies SGS, Cotecna…. Service companies

• Lawyers, insurance brokers, auditors... Association : Geneva Trading and Shipping Association, GTSAUniversity : Master, Diploma, ++

First World War

Second World War First oil

crisis

International organisations

Egyptian cotton

producers

CIS tradingcompanies

Collapse of Soviet Union

International traders

1950 1973 1990

End of the oil majors’ monopoly

2000 2010

Positioning Oil:

• Number 1 : 35% of world oil traded• 75% of ex-USSR exports

Steel• Traders: 10% of global exports• Banks: 60% of exports

Soft commodities• Number 1: cereals and vegetable oils 35%, coffee 50%, sugar

50%, cotton, cocoa• 60% of Russian and Ukrainian exports

Positive momentumFollowing the financial crisis

• Very pragmatic financings• Secured financing of real and physical goods

The commodities sector is part of the real economy• Ensures logistics for and movements of commodities• Ensures that markets are well supplied with strategic products• Contributes to the development of the emerging markets

6Inspection and Certification : Worldwide leader

What Switzerland can bring to Arab financial institutions and commodity houses ? Trends and Developments

With an extremely restrictive regulatory framework : Basel III…….. Liquidity ratio: liquidity coverage ratio (LCR) Funding ratio: net stable funding ratio (NSFR) Capital ratio: leverage ratio (LR) from 4% to 7%, 9% and above

…..and political uncertainties in a debt crisis environment Fall in USD money market funds cheap liquidity "Nationalist" pressures

European banks must take exceptional measures Deleveraging their balance sheets and improve their ratios Downsizing their USD funding requirement Looking for alternative sources of funding

This situation creates a particularly favourable environment for investors, innovative banks and trading companies, indeed

Commodity Trade financing structures will be moving to non-banking type of facilities such as

• Trade finance funds• CLO’s• Securitisations

These investment models are uncorrelated to traditional asset classes, generating good return to investors with a wide range of risk profile

Thank you for your attention

Jacques-Olivier Thomann