Russia’s trade finance community convenes in Moscow for key multilateral industry discussions

Over 230 banking and corporate business leaders from across Russia and the wider region met at GTR’s 6th Annual Russia & Eurasia Trade & Export Finance Conference on February 5th, 2013 to discuss current market conditions and future prospects for the region’s trade finance industry. The event took place at the Hotel Baltschug Kempinksy in Moscow and welcomed excellent support from key domestic and international institutions such as Sberbank, HSBC, Unicredit Bank, J.P. Morgan, ING, and Coastline Solutions, as well as welcoming the Export Insurance Agency of Russia (EXIAR) as Host Agency Partner.

The conference’s keynote address, provided by Russia’s World Trade Organisation (WTO) Chair holder Professor Sergei Sutyrin of St Petersburg State University, outlined the forthcoming challenges and opportunities offered to the banking and business sectors by Russia’s recent WTO accession. Though suggesting that accession would ultimately benefit the Russian economy, Professor Sutyrin cautioned that the real affects of compliance to WTO regulations will not be realised for at least three years to come.

Debate during the one day conference focused on those topics most relevant to the commodity export led economy of Russia and its neighbouring countries, with state-backed ECA support cited on numerous occasions as an increasingly important financing tool, primarily due to its ability to facilitate a source of relatively long term, low cost funding for the region’s exporters.

The viability of the trade funding facilities currently being provided by the private banking sector was called into question during the event, with speakers from some of Russia’s primary commodity producers such as Uralkali, Metalloinvest, Evraz and Gazprom Neft stipulating that capital markets are continuing to provide stiff competition for private banks where the pricing of funds and tenor duration are concerned. They went on to suggest that banks would be well advised to focus on those offerings that cannot be replicated by capital markets through maximising the flexibility of facilities offered to their clients.

A live electronic poll of the audience, predominantly made up of corporates, insurers, trade financiers and risk management professionals, confirmed that the pricing of funds is the most important factor for those seeking to obtain financing on the Russian market.

Proceedings concluded with a comprehensive panel discussion featuring senior representatives from international financial institutions and private and state-backed domestic banks, with panellists predicting a steady year for the trade finance sector despite continuing global market challenges. With a resurgence in capital equipment expenditure cited as the key prerequisite for strong future growth in trade financing, panellists agreed that opportunities were available through greater collaboration between Russia’s state-backed banking giants and domestic and foreign private FIs.

The day was completed with two of the event’s Institutional Partners, the European Bank for Reconstruction and Development (EBRD) and the ICC, conducting the Banking Commission’s annual graduation ceremony, where leading graduates from the Trade Finance E-Learning Programme were awarded for their efforts. this was followed by the evening networking reception, where delegates were able to continue discussions in a more informal setting.