ABN AMRO, the Dutch bank, is closing its Hong Kong diamond business as part of a global trimming of the bank's operations, predominantly outside of Europe. In 2018, ABN AMRO already shut down its US and Dubai diamond operations. A few months ago, the bank reported a net loss of 395 million euros, the first loss in years, and announced it would be reviewing its strategy.
ABN AMRO has announced support measures for clients in response to the impact of the coronavirus. The support extends to some 55,000 Commercial Banking clients with a credit facility of up to 2.5 million euros, for whom the payment of interest and principal will be automatically deferred for six months. While the announcement does not mention diamond industry clients, their inclusion seems implied.
ABN Amro sent a letter to several of its diamond clients stating that it would be limiting finance for rough purchases "in view of the continued lack of profitability in the purchase of rough goods." The letter, which was obtained by JCK and IDEXonline, was sent last week from an Antwerp branch of the Dutch bank to a number of its clients declaring a moratorium on rough loans, pointing implicitly to the industry's reckless behavior in writing, "We recommend you to show constraint [sic] and only consider purchasing rough when there is sufficient profitability." In other words, the b
ABN Amro, the largest and longstanding financier to the diamond and jewelry industry, is closing its lending offices in New York and Dubai as it continues to cut back on financing to the trade as a whole. Brigitte Seegers, a spokeswoman for the Dutch bank, initially announced the move during a first quarter earnings call last week, which will leave Antwerp and Hong Kong as the bank's last divisions standing.
ABN AMRO announced on November 30 that Diamond & Jewellery Clients (D&JC) will become part of Trade & Commodity Finance (TCF) within ABN AMRO’s Commercial & Institutional Banking business. It also announced that Geert van Reisen has been appointed interim Global Head of Diamond & Jewellery Clients, until all internal formalities have been arranged, with effect from 1 December 2017. Geert van Reisen takes over from Erik Jens who has decided to pursue his career outside the bank.
In ABN AMRO's lastest iteration of the biannual Diamond Market Outlook, Coordinator FX & Precious Metals Strategy Georgette Boele writes, "The recovery in the diamond trade has grinded to a halt at the start of 2017", as US consumer spending has been disappointing in Q1, lower consumption in Hong Kong and Macau has negatively affected demand (according to company reports from main jewelers in the region) and Chinese retail sales were weaker in January and February.
“To me, synthetic diamonds are not diamonds. It is a different product. We don’t know what their value is now or how this is going to evolve. So we are not financing lab-grown at the moment, but we may consider it over time, when it is a more mature product."
- Erik Jens, when asked by moderator Rob Bates (JCK) if ABN AMRO is currently financing lab-grown diamond companies during SRK panel debate with Paul Rowley (De Beers) and Tom Moses (GIA) at JCK Las Vegas
The Gem & Jewellery Export Promotion Council (GJEPC) organized an alternative financing seminar this week - Diamond Financing 2017: New Opportunities New Realities - at the WFDB Presidents’ meeting 2017, which was held in Mumbai. Many important members of the industry were in attendance, including Sudhir Mungantiwar, Maharashtra’s Minister of Finance. At the inaugural session, many expressed their concern about the lack of bank financing, such as Anoop Mehta, President of the Bharat Diamond Bourse.
The diamond market has been going through difficult times for a while now, but diamond trade data paint a far more optimistic picture than in June, signalling that trade has turned the corner, writes Georgette Boele of ABN Amro in their "Insights" report. Back in June when ABN last published their diamond insights report, Boele still doubted if global diamond trade would improve, but trade data have clearly improved in all centres, most noticeably in Antwerp, Israel and India.
Hong Kong Jewellery Magazine takes an in-depth look at the adjustments the diamond industry is, or should be, implementing in order to accommodate the changing economy and consumption habits in an environment where the diamond industry "at large is under the gloom of the stagnant economy that impedes buying sentiments in end consumers." With the assistance of three industry insiders - Erik Jens, head of the diamond and jewelry division at ABN AMRO Bank, Nissan Perla, founder of Olympic Diamond and the Diamond Registry, and Lawrence Ma, chairman of the Diamond Federation of Hong Kon
We at ABN AMRO support initiatives that create more insight into the value chain, its key players, engages with the right side of the market and excludes areas which show less transparency or no willingness to learn and improve. We see other banks doing the same more and more. In the end there will only be credit lines available for companies with good corporate standards and track record, whether they are small or big doesn't matter ... We expect more consolidation and certain companies going out of business.
Following the January report “Diamond Sector Outlook: Nothing is forever, ABN AMRO released a new report on the global diamond industry’s outlook for supply and demand and rough and polished prices. ABN AMRO analysts believe trade figures of the main trading and manufacturing centres point to a “fragile improvement”, with "import and export figures in Antwerp bottoming out, the UAE appears to be stabilizing while Israel remains very weak.”
The former top Belgian-Israeli diamond dealer and former De Beers sightholder, Erez Daleyot, who cleared out his Antwerp business leaving behind debts totalling nearly $230 million (€208 million), has thus far eluded his creditors by allegedly hiding out in Israel or South Africa - where he also used to run one of the largest diamond factories, reports Belgian daily De Tijd. Last week, the Antwerp Court of Appeals finally put the case to rest, declaring his former company D.D.
In a recently released report, diamond industry financier ABN-AMRO takes stock of the global diamond industry and concludes two crucial forces in a changed industry landscape will determine the future of the industry; increased price competition and the potential impact of synthetics.
Diamond industry analyst Chaim Even-Zohar has published an analysis of the steps that led to, and the potential results of, De Beers' (DB) deferral of contractually obligated purchases from its own rough supplier in Botswana - Debswana (DW). Suddenly, the standard-bearing producer of rough diamonds is behaving like any other rough trader further downstream, refusing to purchase rough diamonds that are overpriced.
JCK's "Diamond Dialogues", a series meant to take a wider look at the diamond industry and the forces that shape it, has published a thought-provoking presentation by Erik Jens, head of diamond and jewelry clients for ABN Amro, the largest bank in the industry. Jens discusses how other industries, oil in this case, cope with profitability woes, why bankers are wary of the diamond business, and the disruptive change that is quickly heading our way. Jens' considerations reach far and wide.
ABN Amro Bank signed on to sponsor the upcoming Jewelry Industry Summit, which is scheduled for March 10 to 13, 2016 in New York City. The Jewelry Industry Summit is designed as an interactive workshop meant to drive discussions on sustainability and responsible sourcing. Event organizers anticipate creating awareness of supply chain challenges in order to take action that benefits the jewelry industry as a whole, while creating growth opportunities and new sources of value for suppliers and the consumer.
Dutch bank ABN Amro has fired a seventh employee at its Dubai private banking desk following an internal probe into irregularities. Six bankers were sacked in January for failing to comply with internal codes of conduct by enabling clients - mainly Indian private banking clients - to use their personal accounts for illicit business transactions. The Financieele Dagblad said at the time this enabled the clients to use private banking accounts to carry out transactions which should have fallen under a much stricter compliance regime.
The Indian Diamond & Colorstone Association is set to celebrate its 31st annual gala and awards ceremony in Las Vegas on the evening of Friday, May 29. The honorees this year are Diamond Mining Company of the Year: Alrosa Mining Co., Retailer of the Year: Shane Co., Doyenne of the Year: Yancy Weinrich, senior vice president, JCK and Business Banker of the Year: ABN AMRO Bank.
After delays resulting from a public outcry about salary increases for members of the board, the long-awaited privatization of State bank ABN Amro is on the horizon. An initial public offering should take place within the forseeable future, perhaps as soon as Christmas 2015.
Dutch bank ABN AMRO has rolled out WealthSuite, an integrated Wealth Management platform for its international Private Banking business. The move extends the use of T24 to its Private Banking and Diamond & Jewelry business, meaning one operational core banking platform with one operating model across multiple business lines.
"The disturbing issue appeared to be, that for the largest lender to the diamond industry to be pulling out of what is the most important market for the diamond business could hardly be deemed positive news or a vote of confidence."
IndusInd Bank has struck a deal with Royal Bank of Scotland N V to acquire its diamond and jewellery financing business in India and related deposit portfolio; subject to approval from Reserve Bank of India. "We like this business and have a deep insight into the industry. We are also happy to reach a Partnership Agreement with ABN AMRO Bank N V, one of the oldest banks in Diamond and Jewellery financing," said Romesh Sobti, MD & CEO, IndusInd Bank.
A confidential letter sent from supervisory body De Nederlandsche Bank (DNB) to ABN Amro chairman Gerrit Zalm criticised ABN Amro for having "insufficient insight" into the ancillary positions and private interests of its own commissioners. The bank has also delayed the adoption of sufficient measures against the risk of conflicts of interest among its own executives and directors. ABN Amro only hopes to meet the demands of DNB for the prevention of insider trading or conflicts of private and bank interest during the course of the year.
Six members of the managing board of ABN Amro, a major financier of the diamond industry, are to give up on their $108,000 bonus for last year after public protests. The bank was nationalized in 2008, but plans to go public again, possibly this year.
"We understand and regret the turbulence that has arisen," the board wrote in a statement. "The turbulence is detrimental to our clients, our employees and the public’s trust in ABN Amro."
The CEO of the bank's Diamond & Jewellery Clients Unit, Erik Jens: "I don't believe there is a lack of liquidity. I think there is a challenge in certain areas of the market and in certain locations. But there is liquidity available for good companies."
Reports in the Indian press indicate that ABN AMRO Bank will once again set up operations in India, primarily to finance the gem and jewelry sector.
Business-standard.com reported that the regulator has given the Dutch Bank an “in principle nod” to establish a wholly owned subsidiary in India.
JCK's Rob Bates interviews Erik Jens, Head of ABN AMRO's Global Diamond & Jewelry Division, on the bank's new "borrowing base verification" policy, aimed to increase transparency and bankability and allowing the bank to go in-depth on its clients transactions. In Jens's words: “We want to send a strong signal to the market that we are open for business, but we want clients we are happy with,”