Westpac in energy derivatives push

Australian bank Westpac is expanding its energy derivatives product range, with an array of new instruments expected to be approved by the end of the third quarter, according to Paul Quilkey, global head of Westpac Energy in Sydney.

The expansion follows Westpac’s acquisition of Enron’s Australian trading team earlier this year. The team recommenced trading at Westpac in mid-May, with Quilkey, previously managing director of Enron Australia, moving to the bank at the end of March. “The bank's model is to be very much customer focused,” Quilkey said. “The energy derivatives market in Australia is very embryonic and there is a potential for banks to offer corporate risk management services.”

The new products will include Asian options, swaptions and half-hourly options, tradable across all regions in the national electricity market. Renewable energy contracts and weather derivatives are also a focus for the bank, and Westpac has already executed more than 50 transactions since mid-May, according to Quilkey.