BNP Adjourns New Commodity Trade Finance Deals
(06 August 2020 – Europe) BNP Paribas has postponed all pending commodity trade finance deals whilst the bank reviews its existing exposure in Europe, Middle East, and Africa (EMEA).
The bank currently stands as one of the largest lenders to global commodity traders. Nevertheless, in this current climate of uncertainty the bank has told clients that no new deals will be conducted unless there has been a pre-existing contractual agreement in place.
BNP’s commodity trade finance division has already incurred severe losses due to the bank’s exposure to companies such as Phoenix Group, GP Global Group, and other organisations. The bank will evaluate the longevity of this division and may decide to dispose of this unit all together or merge it with existing transaction banking services.
“The risk profile for many corporates working in the commodities industry has been severely amplified by macro-economic uncertainty and climate change. Banks are now doing all they can to ensure that they only finance those who pose the smallest risks” commented East & Partners Europe Market Analyst, Pierre Sokoya.
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