“We are addressing our cost base and are taking measures against a backdrop of continuing unfavourable market conditions to ensure a position of long-term, sustainable strength,” said Chief Executive Officer Wenbin Wang. “If the closures are approved, we will work on an orderly wind down of client positions.”
The closure comes amid a period of heightened turmoil in the raw materials industry as the trade war, slowing economic growth and shifts in technology disrupt traditional markets.
Other commodity traders have struggled in the current environment. Cargill Inc. said in August that it’ll close the base-metals desk at its risk-management unit. Goldman Sachs Group Inc., for decades Wall Street’s dominant commodities trader, also made cuts to the division earlier this year, a person familiar with the matter told Bloomberg News in March.
ICBC Standard Bank, also known as ICBCS, is 60% owned by Industrial & Commercial Bank of China Ltd. and 40% by Standard Bank Group Ltd.
The bank suffered a US$15 million ($20 million) loss last year after declining appetite for emerging-market risk and reduced investment flows hit its trading business. US sanctions against aluminium producer United Co. Rusal also sparked volatility in its base-metals business.
Market conditions have continued to deteriorate for the group. Standard Bank wrote down the value of its holding in ICBCS to US$220 million at the end of September, from US$383 million previously. It’s engaging with ICBC to determine the best way forward for the business, it said in a filing last month.
The base metals business includes aluminium, cobalt, copper, nickel, lead, tin and zinc, according to its website. It also has precious metals, crude oil and refined oil products businesses with offices in London, New York, Singapore and Shanghai.
