HSBC boosts oversight on metals financing in wake of Qingdao probe
Lenders monitoring fallout from Qingdao Port scandal, which has already hit copper prices, with signs it may be spreading to other metals
HSBC, the city's largest bank, which has been aggressively expanding on the mainland, is carefully examining all commodities financing transactions following reports of alleged irregularities at Qingdao Port.
"We continue to provide commodities financing support to our customers," an HSBC spokeswoman told the South China Morning Post.
"Recognising the uncertainty of the situation in Qingdao, we are thoroughly assessing each transaction on its own merit."
HSBC is the latest bank to join lenders such as Standard Chartered and Citi to monitor the fallout of the Qingdao scandal.
Mainland officials are investigating if a company used the same cargo receipts of metals stored at Qingdao Port warehouses multiple times to secure more commodities finance from banks.
Commodities financing has emerged as a source of hot money influx into the country, with some companies using receipts of their metals stockpiled at warehouses of mainland ports as collateral to secure bank loans that are then invested elsewhere.