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LONDON, April 22 (Reuters) - Barclays is to quitmost of its commodities trading businesses, it said on Tuesday,joining a retreat prompted by falling profitability in the faceof tougher regulation.
The British bank's exit means that three of the top fivebanks in commodities have significantly reduced or shutteredtheir natural resource trading arms since last summer amidfalling profits regulatory demands for lenders to hold morecapital to shield them against problems in the business.
Barclays said it would exit most of its metals, energy andagricultural trading but will continue trading precious metals,some oil and gas instruments and index products. The smallerbusiness will be focused on electronic execution, it said.
The bank did not say how many jobs would be lost from itscommodities team of about 160.
Barclays is due to unveil a wider reduction in the size ofits investment bank next month as it attempts to cut costs andimprove profitability by axing areas that have been hit hardesthit by tougher regulation.
It had already cut some of its metal, U.S. power andagricultural trading business.
Some rivals have made more dramatic retreats. JPMorgan Chase& Co is selling its vast physical commodities businessto Swiss-based independent trader Mercuria for $3.5 billion,while Deutsche Bank announced late last year that itwas closing its entire oil, grains and industrial metalsbusiness.
Goldman Sachs and Morgan Stanley, the twobanks that pioneered commodity trading on Wall Street 30 yearsago, remain as the two largest financial participants in thenatural resources sector, despite a ten-year challenge from thelikes of Barclays, Deutsche Bank, Citi and JPMorgan.
But commodities trading revenue for 10 of the world'sbiggest banks fell to $4.5 billion last year, down from morethan $14 billion in 2008, according to estimates from analyticsfirm Coalition. (Reporting by Steve Slater and David Sheppard; Editing by DavidGoodman)