On Monday, the bank told me “it has deep client relationships in the diamond and jewelry industry, and we remain committed to these clients.” However, when I asked if it would be looking for new clients, it declined comment. The bank also issued a statement to clients about Martin’s departure, which said it will continue to service their needs but also seemed noncommittal.
Sources knowledgeable about banking were pretty pessimistic about SC’s future vis-à-vis our business. Clearly, Standard Chartered won’t continue to be what it was originally billed as—a financial institution open to service diamond and jewelry companies. It has huge exposure to our sector (in 2011, it said it loaned the industry more than $2.5 billion a year), so even if it did want to walk away—and the bank has not indicated such—that would take a while.
Standard Chartered’s entrance into the diamonds and jewelry sector began in 2008, when Martin, along with associate Kishore Lall, left her longtime perch at ABN Amro’s New York City branch to establish a new lending division there. The two built up a substantial portfolio in a short amount of time, and at least one industry veteran thinks the division may have helped save the business during the financial crisis.
Since then, the banking industry has seemingly soured on our industry. One person well-informed about the banking sector expressed puzzlement that even institutions that are eager for more clients have little interest in diamond and jewelry lending.
And so we may be once again seeing the new world crash into the old. Maintaining inaccurate books, keeping “black money,” evading taxes, and other practices that have been known to occur in our industry are no longer acceptable to modern financial institutions governed by Basel III and facing increased scrutiny from regulators. The Kimberley Process issues that some in our industry blithely dismiss are taken a little more seriously by bankers.
The lack of financing has long been a problem for our trade. What we don’t want is for this to spiral into a crisis. The industry needs to work collectively to turn this around—fast.
One final note: Martin is headed to the Gemological Institute of America to become senior vice president of global development. I had questions on what her role was, so I called the GIA for clarification. Martin will be a member of the executive team overseeing the organization’s beneficiation efforts—which are still in the initial stages—as well as business development, meaning looking for new opportunities for GIA. The release specifically mentions “deepening our research program, expanding laboratory capacity, and bringing gemological education to more people around the world.”Follow JCK on Instagram: @jckmagazine
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