Kevin Foster of global energy and commodity price reporting agency Argus Media on Wednesday (13 May) published an update on how plummeting oil markets and collapse of some oil trading companies are impacting the sentiments of banks towards the industry:
The fallout from the collapse of Singapore oil trading company Hin Leong is rippling across the global banking sector, compounding concerns about the vulnerability of the city-state’s commodity traders to a pullback in bank financing.
Dutch bank ABN Amro today booked an impairment charge of €225mn ($245mn) because of a “potential case of fraud” at a Singapore terminal, shipping and trading company. It did not name Hin Leong, but court records from the Singapore company’s bankruptcy filing last month show ABN Amro had the second-largest exposure of any bank to Hin Leong, at $300mn.
“The company is suspected of keeping loss-making transactions outside its books… the initial analysis on the possible recovery of the exposure did not give comfort and a significant loss is expected,” ABN Amro said.
Hin Leong made around $800mn in futures losses in recent years that were not reflected in its financial results, court documents show. The company owes banks around $4bn.
UK bank HSBC, which is owed $600mn by Hin Leong, last month said it took a “significant charge related to a corporate exposure in Singapore” in the first quarter. Both banks also blamed lower oil prices for their worsening results in the period.
HSBC has been the most aggressive creditor of Zenrock Commodities Trading, another Singapore oil trading company that has hit financial problems because of the market slump. HSBC, ABN Amro and at least nine other banks have total exposures of around $165mn to Zenrock, court documents show.
HSBC, which is owed around $49mn, has accused Zenrock of dishonestly obtaining multiple sources of financing for crude cargoes.
The bank losses are raising concerns among some Singapore-based traders that financial institutions may cut lending to the sector. Some banks have already stopped or scaled back issuing letters of credit to smaller trading firms and are requiring cargoes to be pre-sold before issuing financing, market participants said.
The Monetary Authority of Singapore (MAS) said last month it was watching developments related to Hin Leong and “has reminded banks not to de-risk indiscriminately from the bunkering and oil trading sectors”.
Photo credit and source: Argus Media
Published: 14 May, 2020
Move is aimed at reducing the group’s reliance on the manufacturing sector through revenue expansion, and is expected to increase net profits by 25%.
The Marshall Islands has voluntarily de-registered the firm from its corporate registry.
The partnership will create a ‘one-stop-shopping’ service for exhaust gas cleaning systems in the region.
Total bunker sales at Panama was 302,330 metric tonnes (mt) in June, compared to sales of 480,464 mt during the similar period in 2019.
The vessel was discovered by the Tanjung Sedili Maritime Zone’s patrol team at 1.35 pm on Sunday (20 September) about 14 nautical miles east of Tanjung Siang.
Proposed combination is subject to various regulatory approvals and shareholders’ approval is expected in Q4 of 2022.
‘This biofuel bunker delivery represents a new chapter for Eng Hua as we are now moving with the times towards the era of decarbonisation,’ Mike Sin, Director at Eng Hua, tells bunkering publication Manifold Times.
MPA has also asked Glencore to improve its internal procedures to ensure that prompt action is taken in future when it becomes aware of, or reasonably suspects, any irregularity in fuel quality, it states.
Dynamic Asset Investments Limited and Goldsland Holdings Co Ltd helped Vermont UM Bunkering maintain a “Cash Float” of about SGD 100,000 to facilitate “buyback” bunker transactions at Singapore port.
Senior Cargo Officer gained SGD 48,800 worth of commission from “buyback” bunker transactions and illegally obtained SGD 410,712.257 by cheating Vermont, a Singapore court heard on Thursday (21 July).
Firm hopes to leverage partnership in Greece as a springboard to expand into neighbouring and overseas markets including Europe and China, says Robin Van Elderen, Regional Head Bunkers, Europe, Sing Fuels.
Singapore can help less developed countries in SouthEast Asia through ‘piloting and scaling fuels and technology as well as a leading hub for green finance’, said DNV Group President and CEO Remi Eriksen.
