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BNP freezes new commodity trade finance deals as it reviews market involvement

06 Aug 2020

French international banking group BNP Paribas SA has halted all new commodity trade finance deals while it assesses its involvement in the industry in Europe, Middle East and Africa, reports Bloomberg.

The bank has allegedly informed its clients that no new deals will be made without any contractual obligation.

BNP’s commodity trade finance department has suffered losses following the bank’s exposure to companies like energy firm GP Global Group, and coffee dealer Coex Coffee International.

During this hiatus, the bank is purportedly considering several options for the future of its specialised commodities trade department, including merging it with BNP’s broader transactions divisions or shutting it down altogether. 

BNP’s move comes after Societe Generale terminated its Singapore trade commodity finance unit following its decision to cut off new credit for oil trading firms in the APAC region after Hin Leong Trading collapse.

Photo credit: 
Floriane Vita
Published: 6 August, 2020.

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