Protorisk assists financial institutions that have commodity exposure. From clients with no prior commodity derivative experience and only simple debt portfolios to those who already have established trading books with residual derivative exposure. We are confident that we can provide solutions that can significantly improve risk and profitability.
Emerging Market Banks are often reliant on corporate lending as the key driver of their profitability. When lending to the Resource Sector, commodity hedging is a perfect example of an ancillary business since it both reduces risk and increases profitability on the financing. Carrying out this business correctly however is not as simple as it may seem. The market is littered with examples of how this business can go wrong. We believe that hedging is a business for the long term, and needs to be approached as such.
Banks with existing, in-house capabilities know that the commodity derivative business is an important source of revenues and risk mitigation. The challenge for smaller institutions is to contain the costs and still run the business professionally. Protorisk advocates a unique approach to this challenge which enables revenues to translate more directly into profitability.