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Standard Chartered Seeks to Curb $2B Diamond Exposure
Mar 24, 2016 3:55 AM
By Rapaport News
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RAPAPORT... Standard Chartered is demanding its clients in the Indian
and Belgian diamond trade get more loan protection in a bid to tighten standards
after lending about $2 billion to the industry, Bloomberg reported.
The
London-based bank, one of the biggest lenders to the sector’s midstream, is
asking diamond manufacturers to get payment insurance or provide 100 percent
collateral, according to the report March 23, which cited people who asked not
to be identified.
Receivables will not be acceptable as collateral and clients
that cannot meet the terms may face higher interest charges or will not have
their debt facilities renewed, the report said, citing the unnamed sources.
"In line with the bank’s strategy of
improving return on capital across its client base globally, we have been
working with clients to find mutually beneficial solutions to continue to bank
the diamond industry against a backdrop of increased compliance reporting and
regulatory capital costs," Standard Chartered said in a statement.
"We continue to provide significant
capital to the diamond sector, despite other banks withdrawing. We are focused
on generating returns which cover our cost of capital, and price accordingly in
line with the market. We are developing innovative solutions and working
with clients and insurance providers to increase the sector's access to capital
and deliver institutional investor funding."
The news comes
after Bill Winters, chief executive officer of Standard Chartered since June
2015, replaced the bank’s entire senior management team as he pledged to review
business lines and customer relationships while ranking their risk-and-reward to
either restructure or scrap about $100 billion in assets, the report said.
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Tags:
Banks, diamond cutters, financial, lending, loans, manufacturers, Manufacturing, midsteam, Rapaport News, Standard Chartered
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