Deutsche Bank has sold its natural gas trading book to Morgan Stanley, a source familiar with the deal confirmed to NGI.
Contacted by NGI, spokesmen for both Deutsche Bank and Morgan Stanley declined to comment on the reported deal.
The deal was first reported by Reuters.
The reported deal comes more than eight months after Deutsche Bank said it was significantly scaling back its commodities business and would exit the dedicated trading desks for energy, agriculture, base metals and dry bulk (see Daily GPI, Dec. 5, 2013).
Late last year, Deutsche Bank, which entered the U.S. natural gas trading market a decade ago (see Daily GPI, Feb. 25, 2004), established a special commodities group to manage the wind-down of the businesses. The decision was part of the company's "Strategy 2015+," an effort announced in 2012 to strengthen capital ratio and create long-term value for shareholders.
Deutsche Bank's gas commodities business, which was ranked No. 41 among marketers by volume of natural gas bought and sold in 2012, dropped out of the Top 50 in 2013, according to an analysis by Natural Gas Intelligence of Form 552 buyer and seller filings with the Federal Energy Regulatory Commission (see Daily GPI, June 5; June 4, 2013).
Deutsche Bank is the latest in a series of major banks to pull out of physical commodities trading (see Daily GPI,April 23). Earlier this year, UK banking giant Barclays said it planned to exit the majority of its global commodities business but would continue to trade precious metals and derivatives tied to the price of oil and gas. In March, JPMorgan Chase & Co. announced the sale of its physical commodities business to Mercuria Energy Group Ltd. in a $3.5 billion all-cash transaction (see Daily GPI, March 19).