ING has announced plans to “refocus” its wholesale banking operations, including trade finance, targeting a smaller number of core clients – though the bank says the decision is unrelated to the string of fraud scandals in Asia’s commodity finance sector.
Chief executive Steven van Rijswijk says the bank’s financial position has remained resilient despite a “challenging external environment”, but that the Covid-19 pandemic is continuing to put pressure on businesses and consumers.
“We are therefore refocusing our activities to ensure faster client delivery and a continuously improving end-to-end digital customer experience,” van Rijswijk says. The announcement comes as ING reports pre-tax profits of €1.2bn for Q3 this year, slightly lower than analyst forecasts.
“In wholesale banking, we will concentrate even more on core clients and simplify our geographical footprint, which will require fewer staff.
“This includes closing our offices in South America and some in Asia, while continuing to serve the international needs of clients from our regional hubs.”
An internal ING presentation seen by GTR says the bank’s offices in Thailand and Malaysia will be closed, following the closure of the Mongolia office in September. Country coverage will be consolidated within Singapore.
“The focus on a smaller number of key clients and review of our global footprint will clearly have an impact on Apac,” the presentation says. Approximately 1,000 jobs will be lost by year-end 2021, across front office, middle office and support operations.
The impact on Emea operations “will differ per country”, it adds, though there is no suggestion of further closures.
ING’s wholesale banking operations include trade, receivables and supply chain finance services, as well as cash and liquidity management, capital markets and sustainable investment.
A spokesperson for the bank tells GTR that the decision “will have impact across the board”.
However, the spokesperson said there is “no relationship between fraud cases from the past and the wholesale bank refocusing announcement”.
ING was one of the largest creditors to Singapore-based commodities trader Agritrade, which collapsed in the first quarter of this year amid allegations of trade finance fraud.
Court documents show that ING was owed US$96.9mn at the time of insolvency, making it one of the largest outstanding creditors alongside Natixis and Commerzbank.
But the bank is not believed to have suffered wider losses as a result of fraudulent activity at other commodities traders, including Hin Leong and Hontop Energy.
Because fraud is not cited as a reason for scaling back operations, ING’s decision is not directly comparable to that of ABN Amro, which announced in August it would withdraw completely from the trade and commodity finance sector following heavy fraud-related losses.
Though other banks are known to be reviewing their activities in the trade finance space, there is currently little sign of further withdrawal announcements.
HSBC says that following positive Q3 results it plans to increase its rate of investment in Asia, particularly in trade finance, sustainable finance and wealth.