ABN’s Clearing Unit Took Big Hit When Client Defaulted

ABN Amro, the Dutch bank, confirmed at the end of March that it sustained a $200m loss when one of its clients failed to meet margin calls to continue trading its positions. The client was Ronin Capital and it had been trading  US options and futures. It could not meet requirements due to ‘extreme stress and dislocation’ in US markets as market volatility jumped at the start of the coronavirus pandemic.

ABN Amro Clearing had to close the client’s position to prevent further loss. The $200m one-off charge at its clearing firm compares with the group’s 2019 earnings of 2.05bn euros. Clearers usually suffer credit losses but not usually on this scale.