ANZ shrugs off metals financing exposure
Bank chief says checks on processes have tightened amid mainland probe into fraud claims over stocks warehoused at Qingdao
Australia & New Zealand Banking Group has tightened its commodity financing processes in China "a little bit" amid a probe into metals stockpiles at Qingdao port, chief executive Michael Smith said.
Financing using commodities as collateral was an "important business" for ANZ, Smith said yesterday, adding he was not worried by any exposure the bank had to that business in China. He did not provide specifics on how the company had beefed up its procedures.
The comments came as Chinese authorities examine allegations of fraud linked to metals warehoused at Qingdao.
Decheng Mining, a trading firm at the centre of the investigation, pledged the same metals stockpile three times over to obtain more than 2.7 billion yuan (HK$3.37 billion) of loans, a person briefed on the matter said.
Historically, these things do come out of the closet occasionally
"Historically, these things do come out of the closet occasionally," Smith said. "This is as old as time and it is up to the individual banks to ensure their risk management is good enough to try to avoid these situations."