(Repeats story published late Thursday; no changes to text)
* Bank pares back repo-only lending, looks to energy sector
* Macquarie metals team loses six people this year
MELBOURNE, Oct 12 (Reuters) – Australia’s Macquarie Group, a rising commodities bank powerhouse due to its turntowards the energy sector, is paring back its aggressive lendingagainst metals, three sources familiar with the matter toldReuters.
Macquarie, which this year broke into the top three banksfor commodities, has trimmed back its loans against physicalmetals inventories, in particular a type of finance calledrepurchase deals or repos, two Asia-based customers and a sourcefamiliar with the matter said.
Macquarie combines this commodities business with financialmarkets and energy under an overall “Commodities and GlobalMarkets” umbrella, which accounted for 21 percent of the bank’sA$2.2 billion ($1.7 billion) in profit for the year to March 31.
A source with knowledge of the matter said Macquarie sawrepo-only deals as taking up too much capital and holding toomuch compliance risk for slim returns, but that the bank wasstill offering repos in broader packages of services such asfinance for hedging or offtake.
The move comes after other banks including Australia and NewZealand Banking Group have retreated from the capitalintensive metals sector and as Macquarie focuses on its thrivingenergy business.
Banks that finance metal are also reviewing procedures aftera warehousing fraud rocked the sector in February, echoing the2013 Qingdao scandal that wiped an estimated $2 billion from theindustry.
“The recent increase in allegations of warehouse fraudaround the marketplace has understandably had them reviewing therisk-return of the repo business,” the source familiar with thematter said.
Macquarie declined to comment.
Macquarie’s focus on energy over the much smaller metals andagriculture businesses has come under Nick O’Kane, who wasappointed to Macquarie’s executive committee this year. O’Kanehad previously headed Macquarie’s energy business.
Macquarie has significantly expanded its U.S. energyoperations in recent years to become the largest non-producermarketer of physical gas in North America.
ANZ followed a well-worn road out of metals earlier thisyear, in the wake of exits by Deutsche Bank andBarclays.
The bank’s metals business has also slowed after a string oftraders and executives departed, sources said. Six members ofthe Macquarie metals team have left this year.
Matthew Forgham, a director with Macquarie in London, willretire from the bank this month, according to Metal Bulletin.Forgham did not respond to a LinkedIn request for comment.
Forgham is the second member of the London metals team toleave this year.
Macquarie’s Sydney-based head of metals and mining,Sebastian Barrack, left Macquarie in April after more than twodecades to join hedge fund Citadel. Guy Keller, formerly head ofbase metals trading for Asia, left in June.
Two other traders have left Macquarie’s Singapore metalsdesk since July.
Macquarie has begun at least partially to rebuild its team.It has shifted one trader to Singapore from Shanghai and movedanother to London from another office. The Financial Timesreported this week that the bank has also hired metals andmining analyst Tom Price from Morgan Stanley.($1 = 1.2768 Australian dollars)(Reporting by Melanie Burton in MELBOURNE and Paulina Duran inSYDNEY; Editing by Tom Hogue)