Industrial & Commercial Bank of China, the nation’s largest lender, suspended sales of more products that allowed retail investors to speculate on swings in commodities after many were burnt by the unprecedented crash in crude oil, reported Bloomberg.
The lender will temporarily halt opening of new positions in products linked to crude oil, natural gas, and soybeans for individuals from 9 a.m. on Tuesday, according to a statement on Monday. ICBC said the suspension is to protect clients’ interests due to the recent volatility in commodities.
The move comes after a product linked to oil, sold by rival Bank of China, lead to more than $1 billion in losses for clients after falling below zero, suggesting there’s a hidden pocket of risk in the system. Official figures show there are about RMB 1.88 billion ($265 million) in outstanding in commodity-related investment vehicles, making up less than 0.01% of China’s wealth product market.
The implosion of Bank of China’s “Crude Oil Treasure” caused an uproar among investors, who have taken to the Internet to protest the lender’s handling of the contract rollover and to demand it shoulder some of the losses. Investors in similar products offered by other banks mostly avoided that type of loss due to different designs.