(Bloomberg) -- Societe Generale SA is closing its trade commodity finance unit in Singapore after the collapse of Hin Leong Trading (Pte) Ltd. prompted the bank to halt fresh funding to such firms in the region.
The bank is dismissing all front office staff dealing with transactions, while still keeping some administrative workers, the people said, asking not to be named because the matter is private. Large Asian commodities trading clients with operations in Singapore will now be handled by Hong Kong, the people said. The lender will no longer work with Singapore-based small and medium commodities trading firms, according to the people.
“Natural resources financing is one of Societe Generale’s core expertise, the bank said in an emailed statement on Friday. “The bank is and will remain committed to the Trade Commodity Finance sector, including in Asia. Societe Generale continuously adapts its set up to better serve its global and local clients and leverages its presence and strengths in Asia to bring proximity and appropriate solutions to its clients.”
Earlier this year, SocGen was among more than 20 Singaporean and international banks owed $3.8 billion by oil trader Hin Leong, which filed for creditor protection after crude prices crashed. The French bank, which was owed $240 million by the firm, later decided to freeze the allocation of new funds to oil traders in Asia Pacific.
Plummeting oil prices and rising bankruptcies are forcing French lenders to review their trade commodities financing activities. Earlier this month, Natixis said it was merging its infrastructure and commodities operations, in a move planned before the coronavirus crisis, but which was accelerated in the last months.
©2020 Bloomberg L.P.
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