JPMorgan Chase & Co. led lending to commodities companies for a third consecutive year even as global financing to the industry fell to the lowest since 2010.
The biggest U.S. bank by assets arranged $44.1 billion of loans, giving the New York-based company a 7.8% market share, according to data compiled by Bloomberg. Bank of America Corp. and Citigroup Inc. came next. Three Canadian banks were in the top 10, from one a year ago, as European lenders retreated.
Loans fell 23% to $568 billion last year after mergers and acquisitions diminished to the lowest annual total since 2010. Deals accelerated in the fourth quarter to the highest in five years, including OAO Rosneft’s $55 billion purchase of oil producer TNK-BP, as economic growth improved. Stock markets are rising for a third consecutive month after U.S. lawmakers reached a budget agreement.
“Since there hasn’t been much M&A for the past couple of years, there is some pent-up demand,” said Thomas Cassin, co- head of investment-grade finance at JPMorgan in New York. “Having more clarity around the fiscal cliff, the debt ceiling and just the direction of the economy in general will bring to bear a bit more confidence and willingness to go out and look at the M&A.”
Commodities stagnated in 2012, with the Standard & Poor’s GSCI gauge of 24 raw materials rising 0.3%, the least in five years. The 140-member Bloomberg World Mining Index advanced 2.9 percent, lagging behind the 13% gain in the MSCI All-Country World Index of equities. Natural-resource and energy companies announced $610 billion of mergers and acquisitions, 8.3% less than in 2011, data compiled by Bloomberg show.
Bank of America, the second-biggest U.S. lender by assets, arranged $30.8 billion of loans, and New York-based Citigroup $30.6 billion, giving them both a 5.4% market share. Combined lending by the top three banks fell 36% from a year ago.
Wells Fargo & Co. overtook BNP Paribas SA to take the fourth slot after buying $9.5 billion of the French bank’s energy loans in February. The Paris-based lender retreated 10 places in the rankings, as rival Societe Generale dropped to 19th from 15th. The figures as of yesterday reflect transactions involving more than one bank and include credit lines, project or term loans and trade finance. Wells Fargo’s total was $29.3 billion in loans, for a 5.2% share.