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ABN Amro Exit Threatens Commodity-Trader Liquidity Squeeze

  • Options for trade finance are waning as another bank retreats
  • ABN Amro’s loans to wind down in next three to four years: CFO
Employees work in trading pods in the dealing room trading floor at the ABN Amro Group NV headquarters in Amsterdam.

Employees work in trading pods in the dealing room trading floor at the ABN Amro Group NV headquarters in Amsterdam.

Photographer: Peter Boer/Bloomberg

ABN Amro Bank NV became the latest bank to exit the commodity and trade finance business, further shrinking the pool of funds available to trading houses moving trillions of dollars of oil, metals and grains around the world every year.

The Amsterdam-based lender, once a key pillar of a triumvirate of Dutch banks providing short-term loans to traders, said Wednesday it’ll close the division after racking up losses from a series of trading scandals. Following similar retreats by one-time stalwarts BNP Paribas SA and Societe Generale SA, it’s a blow for commodity traders dependent on such credit to fund their operations.