Credit Agricole to exit precious metals trading, shift focus to carbon markets by 2025
Credit Agricole, France’s second-largest listed bank, has decided to exit the precious metals trading market and shift its focus towards regulated carbon markets starting in 2025, as reported by Reuters.
“Credit Agricole is exiting precious metals, it is managing existing risk and letting the book positions roll off,” one of the sources said.
The move is seen as part of the bank’s broader strategy to align with its environmental goals and capitalize on the growing attractiveness of carbon trading, particularly in the European Union’s Emissions Trading System (ETS), which accounted for 87% of the global carbon market valued at €881 billion ($949 billion) in 2023.
“The bank is instead looking to focus on carbon markets with a view to commencing trading next year,” the source said, adding that management was seeking to align the move to the carbon market with Credit Agricole’s “green ambitions”.
The EU Emissions Trading System (ETS) is the world’s most valuable carbon market. Credit Agricole aims to align with its green ambitions, starting carbon trading next year. The bank had previously downsized its precious metals business after experiencing losses during the 2020 pandemic, which disrupted the gold market. Now, the focus is on carbon markets to bolster future revenues.
The bank’s precious metals business, according to one of the sources, was making several tens of millions of dollars a year before 2020. For comparison, global gold trading volumes were estimated by the World Gold Council at $241 billion a day in August, according to Reuters.
“They did try to re-grow the business two years ago but never really got going unfortunately,” said another of the sources. “The decision was then made to transfer the balance sheet to new markets like carbon to help bolster revenues.”
Although Credit Agricole’s exit from the precious metals market is not expected to significantly impact the industry—given that its involvement was small compared to the market’s giants—the decision reflects broader shifts in the financial sector towards sustainability. The bank’s new focus on carbon trading is expected to commence in 2025, marking a significant step in its strategic realignment towards supporting the global energy transition.
Source: Polina Devitt, Thomson Reuters, Reuters, September 16, 2024
