JPMorgan drops, cuts credit to Indian metals clients – broker

By Eric Onstad and Niket Nishant

LONDON/BENGALURU (Reuters) -JPMorgan Chase & Co has dropped or cut credit lines to a large number of Indian metals clients, sending them looking for new brokers, the head of Nanhua Financial UK told Reuters.

JPMorgan declined to comment.

Reuters reported last September that JPMorgan had pared back credit to customers in Europe and Asia after a review of risk, according to sources close to the situation.

“Loads of Indian clients have enquired because JP Morgan cancelled their accounts,” said Nong Yan, chief executive of Nanhua Financial UK, the British arm of one of the biggest future brokers in China.

Nanhua became a member of the London Metal Exchange in 2018.

In some cases the Indian clients had large credit lines with JP Morgan that her brokerage was not able to match, but Nanhua was doing its best to accommodate them for their hedging requirements, Yan added.

“The risk appetite is just not there anymore.”

Some clients from China had also been dropped by JP Morgan, but most of them had multiple brokers so the loss was not as significant, she added.

Bloomberg News reported on Thursday that JP Morgan had made deep cuts to its metals business and slashed bonuses of its bankers after last year’s nickel crisis, citing people familiar with the matter.

The bank also declined to comment on that report.

Broker Marex Financial has also been picking up new clients as JP Morgan and other banks reduce their exposure to metals and commodities, its chief executive said.

“It’s not just JP Morgan, all of these banks are sharpening their focus. The broad trend is for them to focus on their very largest clients,” Ian Lowitt told Reuters.

“It creates opportunity for us to add clients.”

Record 2022 results and a successful takeover have boosted the potential for a listing of Marex when markets recover, Lowitt said .

JPMorgan’s metals business has been under strict internal scrutiny due to the bank’s role in the upheaval last year, when the London Metal Exchange (LME) was forced to suspend nickel trading after the metal’s prices doubled.

The surge was attributed to China’s Tsingshan Holding Group buying large amounts of nickel to reduce its short positions in the metal.

(Reporting by Niket Nishant in Bengaluru and Eric Onstad in London; Editing by Shinjini Ganguli and Diane Craft)