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Brazil’s BTG to bulk up London commodities, add 100 staff

Dec 24 (Reuters) – Brazilian investment bank Grupo BTG Pactual SA will step up its expansion in commodities and add about 100 more staff in London, a person familiar with the matter said on Tuesday.

The Sao Paulo-based bank already has about 100 staff in the British capital and has taken another floor at its office there, which will serve as its commodities arm’s headquarters.

The roughly 100 additional employees will mostly work in commodities, although the company is also expected to continue expanding in asset management and investment banking, the source said.

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The bank, controlled by billionaire financier André Esteves, has this year made a bold push into the global commodity markets just as other banks bow out, betting it can avoid the regulatory pressure rattling rivals.

U.S. lawmakers and regulators have stepped up scrutiny of Wall Street’s giants over their physical commodity operations, forcing banks including Deutsche Bank and JPMorgan to pull out or shrink their commodities business.

But privately owned BTG Pactual has forged ahead with a $300 million-plus expansion plan that has taken the industry by storm. It hired former Noble Group chief executive Ricardo Leiman to lead the drive and hired traders, managers and analysts in London, Geneva and New York to cover everything from freight to grains to natural gas.

The bank sees opportunities to grab business left by rivals and to build on its strong position in Brazil, one of the world’s major commodities countries.

BTG declined to comment.

Its expansion stands out in an industry that has seen attrition from big banks over the past several years as firms have been squeezed by lower margins, higher capital requirements and growing political and regulatory scrutiny of the role of banks in the natural resources supply chain.

Deutsche Bank had been one of the top five banks in commodities but this month pulled the plug on the trading business, cutting 200 jobs.

Smaller player UBS had already pulled back, and big commodities rivals JPMorgan and Morgan Stanley are in the process of selling out from commodities trading. Barclays has cut its division by a fifth.

BTG Pactual, formed in 2009 when Esteves’ Bank and Trading Group acquired UBS Pactual, is branching out as part of a broader push to diversify its revenue base, which is mostly driven by its trading unit and asset management business.