HSBC, Standard Chartered commodities exposures high as traders struggle

Standard Chartered and HSBC have notched high exposures to some of the world's biggest commodities traders at a time when low oil and raw materials prices are hitting trading houses.

Standard Chartered had about US$1.9 billion in syndicated-loan exposure at four major commodities traders, more than any other British-based bank, according to data from Sanford C Bernstein. Of that debt, more than US$1 billion was at Geneva-based Trafigura.

HSBC had the second-largest commodities exposure among British banks, with US$1.3 billion in syndicated lending connected to four firms, and roughly half of that at the world's biggest commodities trader Glencore.

The levels of exposure are a concern for the banks because many commodities - oil the key example - are trading at decade lows, hitting the profitability of trading companies and potentially impacting the repayment of the debt.

The S&P GSGI Brent Crude index has fallen about 55 per cent over the past 12 months.

While rating agencies have maintained investment-grade ratings on Glencore's bonds, unsecured senior debt maturing in May next year traded at below 93 cents to the dollar last week, or in the junk-bond pricing range, US media reported.