JacquesOlivier Thomann Honorary President Geneva Trading and Shipping

Jacques-Olivier Thomann Honorary 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 Thomann Board member Geneva Financial Center Geneva April, 3 rd 2014 Honorary President GTSA

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Role of Switzerland as a hub for commodity trading and finance 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 Ø Ø Ø Commodity trading companies Trade finance Banks Ship chartering Legal Inspection and certification Commodity sectorial Associations c 10, 000 jobs relating to the sector c Over 400 companies c 3, 5% + of GDP 4

Geneva Trading and Shipping Association Founded 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 5

The Lake Geneva Region, the centre for commodity trading Key dates First Second World War First oil War crisis Players in the sector Trading companies Collapse of Soviet Union • Several hundred billion in combined revenue • Approx. 400 companies including Cargill, Mercuria, Vitol, Trafigura, Louis Dreyfus, Totsa, Bunge, Addax, Gunvor, Metinvest, Sucafina … 1950 1973 1990 2000 2010 Banks • Aprox. 15 including BNPP, Crédit Agricole, ING, Société Générale, Credit Suisse, UBS, the cantonal banks, Arab Bank, National Bank of Abu Dhabi, BCP… International organisations Egyptian End cotton of the oil producers majors’ monopoly CIS International traders trading companies 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. . . Positioning Oil: Association : Geneva Trading and Shipping Association, GTSA University : Master, Diploma, ++ Positive momentum • Number 1 : 35% of world oil traded • 75% of ex-USSR exports Following the financial crisis • Traders: 10% of global exports • Banks: 60% of exports The commodities sector is part of the real economy Steel Soft commodities • Number 1: cereals and vegetable oils 35%, coffee 50%, sugar 50%, cotton, cocoa • Very pragmatic financings • Secured financing of real and physical goods • Ensures logistics for and movements of commodities • Ensures that markets are well supplied with strategic products • Contributes to the development of the emerging markets • 60% of Russian and Ukrainian exports Inspection and Certification : Worldwide leader 6

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

Thank you for your attention Jacques-Olivier Thomann