In a first, Goldman not among top 3 commodity banks as trading losses weigh

Goldman Sachs Group Inc, for decades Wall Street’s dominant commodities trader, has lost its place among the top three banks in the sector for the first time, according to research group Coalition Development Ltd.

Trading losses in natural gas and power dragged Goldman to its worst annual performance in commodities in its history as a public company last year, leading to a string of high profile exits from the bank’s raw-materials unit.

Last year, JPMorgan Chase & Co., Morgan Stanley and Citigroup Inc. leapfrogged Goldman to the top spots for commodities revenues at the dozen big banks Coalition tracks, the researcher said Thursday. It’s the first time that Goldman hasn’t featured in the top three in data going back to 2010, and likely since long before that. 

The lender, together with Morgan Stanley, has long dominated the sector and helped to popularize commodities as an investable asset class.

While JPMorgan and Morgan Stanley tied first in Coalition’s ranking, Australian lender Macquarie Group Ltd. -- which isn’t included in researcher’s league table -- probably came first in commodities revenue last year among banks globally, said Amrit Shahani, research director at Coalition.

As a whole, big banks’ commodity revenues slid 42 per cent last year to the lowest level in more than a decade, Coalition estimated in February. The drop was driven by poor bets on oil and gas, low volatility and subdued trading.

Goldman ranked between fourth and sixth for commodities revenues last year, according to Coalition. The researcher’s analysis doesn’t include Australian, Canadian or emerging-market banks that have a large presence in commodities.