Geneva officials seek to attract Chinese banks, companies

Tue May 4, By Laura MacInnis and Robin Bleeker
GENEVA, May 4 (Reuters) - 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 moved to 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