Commodity Derivatives House: Bank of America
Precious investments
Volatility returned in 2025 as US tariff policies took effect across various commodities, increasing the importance of client hedging and financing needs. For supporting clients in this difficult environment while diversifying its franchise across regions, products and client types, Bank of America is IFR’s Commodity Derivatives House of the Year.
Since the tumult of 2022, when wild market gyrations accompanied the outbreak of war in Ukraine, commodity markets have largely taken a back seat to more dramatic moves in other asset classes. Then came 2025.
As US president Donald Trump’s sweeping tariffs started taking affect across various commodities imported into the US, companies scrambled to reassess their exposures – spurring a flurry of hedging and financing activity.
Bank of America was primed to capitalise on the ensuing volatility, helping clients navigate the uncertainty in agricultural products while allowing others to unlock the opportunities in surging precious metals prices.
The results stand testament to the significant investments BofA has made to diversify its commodities business over several years, transforming it from a US corporate and energy-centric franchise into a truly diversified operation spanning regions, products and client types.
“The investments that we've made over the years have put us in a position to capture that volatility,” said George Cultraro, global head of commodities. “[That is] one of the benefits of having a good, well-rounded business.”
The numbers tell their own story. BofA has more than doubled its commodities revenues since 2020, growing its business consistently each year even as the wider industry has seen some dips in activity. Deliberate growth outside the Americas has ensured a more even presence across regions, with BofA’s home market accounting for 55%–60% of total revenues this year compared with 75% in 2020 to 2021.
That diversification push has also yielded a more balanced book of business. Three-quarters of BofA’s commodities revenues now come from its corporate and institutional clients, split roughly down the middle, with origination accounting for the remainder. That’s a far cry from 2020 to 2021 when corporates represented up to half its revenues. It also comes amid growth in all three business segments.
“If you don’t have a fully established business across the different products, regions [and] client types [then] your revenues can swing dramatically based on the opportunity set,” said Thomas Blair, global head of commodity sales and structured origination. “We want to be agnostic to market performance so we can deliver for clients … in all market environments.”
Fleshing out its metals franchise represents one of BofA’s major product diversification drives in recent years – and one that paid off handsomely in 2025’s volatile markets. As precious metals prices soared, BofA’s investments in physical trading came to the fore as it was able to help clients seize on glaring arbitrages between the price of gold and other products in different trading centres across the globe.
Having hired external talent across trading, sales and structuring – and made significant investments to its precious metals trading platform – BofA was able to fulfil soaring client demand to physically move metal across borders, whether for risk management or investment purposes.
Such trading, alongside gold hedges related to large M&A transactions in Asia and broader precious metals financing activity for clients, has seen precious metals contribute roughly 25% to BofA’s total commodities revenues in 2025 – up from less than 10% historically.
“In a lot of ways, [our precious metals] investment paid immediate dividends,” said Blair. “Those increased product capabilities allowed us to really step in when … prices moved sharply.”
Prior investments in its agriculture business also bore fruit this year as prices see-sawed, with the firm’s traded volumes increasing 20% to 25%. Having those capabilities has opened other doors for BofA as well.
In one landmark trade, BofA provided a plastics hedge to a large consumer beverage manufacturer that was four to five times bigger in US dollar notional terms than a separate agriculture-related trade that the client did with BofA.
“We never would have seen that opportunity if we hadn't approached that client holistically, bringing our agriculture expertise,” said Blair. “Agriculture is a very unique capability to have. So clients value it in a large way.”
Far from resting on its laurels, BofA is already thinking about 2026 and beyond. That includes planning how it can capture future energy and metal client trades following the huge investment from technology companies in data centres and artificial intelligence.
“There’s just a lot of opportunity,” said Cultraro. “How do we continue to expand into those areas where we have core client needs and a specific location or speciality in the market that gives us an advantage?”