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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.
Tags: Banks, diamond cutters, financial, lending, loans, manufacturers, Manufacturing, midsteam, Rapaport News, Standard Chartered
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