CORRECTED-Geneva seeks to become hub for Chinese banking

(Clarifies in thirteenth paragraph that Blue Crest and Brevan
Howar have opened offices in Geneva but not moved entire
operations.)

* Geneva officials seek to attract Chinese banks, companies

* Say talks ongoing with a number of firms to move to city

By Laura MacInnis and Robin Bleeker

GENEVA, May 4 (BestGrowthStock) – Geneva is seeking to transform
itself into a hub for Chinese banking and commerce, building on
its new strength in commodity trading and hedge funds, officials
from the city’s economic promotion division said on Tuesday.

The officials told a news conference they were in
discussions with “a certain number” of Chinese companies
interested in setting up in the city, which is already home to
two Bank of China (601988.SS: ) subsidiaries.

“There are many Chinese delegations that are coming to
visit,” said Daniel Loeffler, director of the economic promotion
division.

He declined to name the companies from China that were
interested in a Swiss base, but said that talks with some of
them have been underway for some time.

“The process is relatively long,” he said. “The fruits of
this activity should arrive soon.”

Geneva has long been the home of secretive, elite banks
catering in particular to wealthy Middle Eastern, Russian and
Latin American clients.

However in the last five years, low tax rates and other
incentives have transformed the second-largest Swiss city into a
major hub of oil and commodity trading as well as for hedge
funds, a number of which have moved from London due to the
higher taxes in the United Kingdom.

The Hong Kong-based GMT Shipping Group and Addax Petroleum,
which was purchased last year for $7.24 billion by China’s
Sinopec (600028.SS: ), are both based in Geneva, along with Bank
of China (Suisse) SA and BOC (Suisse) Fund Management.

Switzerland has also sent a large delegation to Shanghai’s
World Expo, which opened this week. The 4,000 square metre Swiss
Pavillion is one of the largest and most expensive on display.

QUIET GROWTH

While Geneva’s storied banks were squeezed by the global
financial crisis and the crackdown on banking secrecy, its
commodity and oil community still thrived, and trading houses
and hedge funds continued to move there.

This quiet transformation has helped to diversify the Swiss
financial landscape and the city now brokers some 33 percent of
global petroleum and sugar trading, 30 percent of grain trading
and 22 percent of raw material shipments, according to BNP
Paribas figures. [ID:nLDE63Q0WU]

Commodity and energy trading contributes as much as 2.5
percent to Switzerland’s gross domestic product, which is more
revenue than from foreign tourists visiting the Swiss Alps to
ski and hike. [ID:nLDE63R1WV]

Physical commodities traders, including Total’s (TOTF.PA: )
trading arm Totsa, Vitol [VITOLV.UL], LUKOIL-owned (LKOH.MM: )
Litasco, Louis Dreyfus and Cargill [CARG.UL] all have offices in
Geneva and European hedge fund firms Blue Crest and Brevan
Howard have also opened offices in Geneva in recent months.

Switzerland is also home to major oilfield services and
offshore drilling companies, including Weatherford (WFT.N: ),
Noble Corp (NE.N: ) and Transocean Ltd (RIGN.S: ), which listed on
the Swiss SIX stock exchange last month. [ID:nLDE63I0VL] The
metals trading giant Glencore [GLEN.UL] is based in Zug, near
Zurich.

Investment

CORRECTED-Geneva seeks to become hub for Chinese banking