Emerging markets focused lender, Standard Chartered Bank <2888.HK>, has shuttered its global loans trading unit, sources familiar with the matter told Reuters on Wednesday, ending a unique experiment in Asia, as it moves to focus on lending to clients.

The roughly 10-person trading team with desks in New York, London and Singapore, was established in 2002 and led by global head of secondary trading Rafael Valbuena.

We are rationalizing the secondary loan trading business, said a StanChart spokeswoman in an email.

She added the bank may move members from the trading team to the bank's core loan syndication business.

We remain committed to our successful primary loan syndication business, she said.

StanChart's loans trading team was unique in Asia Pacific for trading high-grade corporate loans in a region where most banks hold loans to maturity, and rarely trade them because of a cultural focus on client relationships.

It was not clear why StanChart decided to shut the unit, but the operation was not integrated to the bank's traditional lending business and was considered non-core.

Investment banks like Bank of America Merrill Lynch , Credit Suisse , Deutsche Bank and Goldman Sachs have loan trading desks in Asia Pacific, but they primarily trade stressed and distressed debt.

Loan market sources outside StanChart said the closure was a blow to development of loans trading in Asia, which is a low volume and illiquid market compared with its global counterparts.

Loans trading in Europe and North America generate high volumes and strong liquidity through jumbo loans, which are often taken up and traded by institutional investors.

An inaugural survey of trading in Asia for the first half of 2010 by Thomson Reuters LPC showed $5.67 billion of deals, but for the first quarter of the same year, European trade totaled 18.6 billion euros ($25.09 billion) and U.S. trade was $85 billion.

Sources declined to be named because they were not authorized to talk to the media.

(Reporting by Stephen Aldred; Editing by Ken Wills)

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