ABN AMRO is closing its New York City and Dubai, United Arab Emirates, diamond and jewelry lending offices, the bank confirmed to JCK.
ABN AMRO’s New York City diamond division has long been an industry institution and was, until now, one of the last remaining bank offices devoted to serving diamond and jewelry clients in the United States.
“We are discontinu[ing] our local diamond and jewelry service in the United States, due to the very small portfolio,” says Brigitte Seegers, spokesperson for the Amsterdam-based company. “The decision to close our diamond and jewelry clients in Dubai is linked to the decision to discontinue our overall presence in the United Arab Emirates due to lack of scale. We are in close contact with our diamond and jewelry clients in these locations to find alternative solutions.”
Until recently, the bank, traditionally the industry’s biggest lender, had maintained diamond and jewelry division representative offices in Hong Kong, New York City, Dubai, and Antwerp, Belgium. Now the division only has offices in Hong Kong and Antwerp. The Dubai representative office opened in 2012.
On a May 14 earnings call, ABN AMRO executives were crystal clear that they wanted less to do with the diamond business, according to a SeekingAlpha transcript.
ABN AMRO chief financial officer Clifford Abrahams analysts that “we have reduced exposure consistently over time to [the diamond and jewelry] sector.”
Chief risk officer Tanja Cuppen also noted that in the last quarter, “EUR 41 million [in impairments] was taken for a handful of clients in the diamond and jewelry business, where our loan book has been declining over the number of years.”
News of the closures follows the December departure of Erik Jens, who served as ABN’s global head of diamond and jewelry clients for five years. Jens was replaced by Geert van Reisen as part of a reshuffling that made ABN’s diamond and jewelry department part of the bank’s trade and commodity finance division.
Despite the cutbacks, ABN AMRO is one of the few banks that still does service the diamond trade. In the last several years, Antwerp Diamond Bank has shut its doors, and a number of lenders have eliminated their diamond and jewelry divisions, including Bank Leumi, Sovereign, JPMorgan Chase, and Standard Chartered Bank. Standard Chartered’s chief financial officer recently indicated to CNBC that the bank regretted its involvement with the diamond business.