August 20, 2015 / 1:46 PM / in 2 years

UPDATE 1-Deutsche Bank to resign as London bullion clearer - sources

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By Clara Denina

LONDON, Aug 20 (Reuters) - Deutsche Bank is to sever its last link with commodity trading by resigning as a clearing member of the London gold and silver over-the-counter business, two industry sources close to the matter said on Thursday.

The move leaves five banks -- Barclays, HSBC , Bank of Nova Scotia, JP Morgan and UBS -- to settle daily bullion transactions between dealers, amounting to more than $5 trillion worth of metal each year.

“Deutsche Bank is resigning as a shareholding member of the London Precious Metals Clearing (LPMCL) company,” one of the sources said.

Deutsche declined to comment.

The German bank was a founding member of the LPMCL, which was set up in 2001 to develop an electronic matching system to replace trading by phone or fax.

It closed its physical precious metals trading arm in November 2014, after exiting other physical commodities business, covering energy, base metals and dry bulks in 2013.

The bank withdrew from gold and silver benchmark price setting in January 2014.

“Deutsche Bank told the LPMCL and other clearers they are resigning and there are a few companies interested,” an industry source said.

Another banking source said when “Deutsche were closing their precious metals trading business, they offered their clients base and other services to the market (other banks).”

But with other banks also withdrawing from the commodities business to cut costs and reduce their regulatory burden, it “would always be difficult to find takers,” the source added.

However, the first banking source said “there is one other bank, Standard Chartered, that could become a gold and silver clearing member in the next few months.”

Standard Chartered declined to comment.

Editing by Pratima Desai and Pravin Char

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