GTR is happy to announce the results of its annual readers’ poll Leaders in Trade 2011.
Over 6,000 votes have been casted during the last month for banks, financial institutions, insurers and brokers.
The awards aim to highlight achievements in specific geographical regions and particular product lines.
Below is the complete list of winners.
Best global trade finance bank
HSBC
Best global export finance bank
HSBC
Best global commodity finance bank
ING
Best structured commodity finance bank
Deutsche Bank
Best supply chain finance bank
J P Morgan
Best trade finance bank in Latin America (including the Caribbean)
BBVA
Best trade finance bank in South Asia (including India, Pakistan, Bangladesh)
Standard Chartered
Best trade finance bank in Australia and Pacific
ANZ
Best trade finance bank in Asia Pacific
Citi
Best trade finance bank in the Middle East and North Africa
HSBC
Best trade finance bank in Sub-Saharan Africa
Standard Bank
Best trade finance Bank in West Africa
FBN Bank
Best trade finance bank in the Nordic Region
SEB
Best trade finance bank in North America
Bank of America Merrill Lynch
Best trade finance bank in Eastern Europe
UniCredit
Best trade finance bank in Western Europe
RBS
Best forfaiting institution
UniCredit
Best factoring house
Fimbank
Best Islamic trade finance bank
ITFC
Best boutique trade finance institution
London Forfaiting Company (LFC)
Best trade outsourcing bank
BNY Mellon
Best trade credit and political risk insurance broker
BPL Global
Best trade credit insurance underwriter
Chartis
Best political risk insurance underwriter
Ace
Best development bank in trade
African Development Bank
Best export credit agency
US Exim
Best trade finance software provider
Misys
Best bank for documentary processing
RBS
Best global export finance bank
HSBC was the clear winner of the award for best export finance bank in GTR’s annual readers’ poll.
“HSBC sets great store in supporting its core export/import clients across the world in all aspects of cross-border finance. We have delivered many different financing solutions at a time of extreme economic and financial turbulence and we remain proud of our record of concluding commercial, export and project finance structures to the benefit of both the developing and developed world,” comments Peter Luketa, global head of export finance at HSBC.
The bank had already proven itself as a leading player in the export finance market last year with the third quarter 2011 results of Dealogic’s trade finance tables revealing HSBC as top of the ECA-backed trade finance loan rankings with US$3.4bn deals closed.
HSBC has continued to sign export deal after export deal, despite the fact that globally ECA guarantee volume was down in the third quarter of 2011, falling to US$10bn from US$11.6bn in the previous quarter.
Overall global trade finance volumes reached US$114bn in the first nine months of 2011, down by 6% in the same period in 2010.
Some of the deals signed in 2011 include some ground-breaking transactions. In November last year, HSBC signed a US$24mn medium-term facility to finance telecommunications equipment to Iraq-based mobile operator Asiacell.
The deal was insured by Germany’s export credit agency Euler Hermes and marks Asiacell’s first ever ECA-supported financing, as well as the first ECA financing into Iraq since the 1980s.
HSBC was also involved in a US$1bn line of credit for the Brazilian oil company Petrobras (with three other banks). The facility was backed by the UK export credit agency, UK Export Finance and signed in November last year.
The facility provides cover and financing for multiple commercial contracts entered into by Petrobras with British suppliers.
More recently, in early November, HSBC closed a seven-year €150mn rouble-denominated deal alongside Russian state-owned bank VEB for a Danish firm to construct Russia’s largest cement plant.
Best global commodity finance bank
GTR readers voted ING Bank as the best commodity finance bank in 2011.
Paul van Heerde, global head, commodities group, said it was gratifying to be recognised by GTR readers.
“It’s a reward for the many years of consistency, predictability and global reach that the TCF franchise has been demonstrating, both to the market and internally. Our approach is obviously very well appreciated by clients and other market participants given the large group that voted for ING,” he comments.
ING’s success in GTR’s annual readers’ poll reflects the achievements the structured finance division has had during 2011, contributing significantly to the bottom line of the bank as a whole.
The structured finance division incorporates international trade and export finance (TCF and structured export finance combined) and sector-base structured finance in natural resources, utilities, power, infrastructure, and telecom, media and technology finance.
According to the bank’s second quarter results for 2011, the structured finance division posted year-on-year underlying pre-tax results of €298mn, up 61% from the same period in 2010.
ING has had a long-standing presence in the commodity finance markets.
Reflecting its Dutch roots, the bank is a leading financier to both commodity producers, primary producers and traders, financing the movement of oil, metals and grain across the globe.
Best supply chain finance bank
JP Morgan’s supply chain business has come out tops for the second year running, providing further recognition of the market leadership and strength of its supply chain finance franchise.
Despite last year’s economic uncertainty and volatility, the bank remained committed to long-term investment in supply chain finance and further enhanced its technology, geographic footprint and risk distribution capabilities to enable clients to access additional sources of liquidity and meet their business demands globally.
“The continued expansion of our client’s supply chain finance programmes results in a greater need to source liquidity from a range of providers. JP Morgan has distributed in excess of US$1.3bn in buyer-led supply chain finance assets year to date in 2011, bringing additional liquidity to support our clients’ and their suppliers’ working capital needs,” says Andrew Betts, the bank’s global head of supply chain treasury services.
As clients’ supply chain finance needs become more localised, providers are required to respond with more local solutions. During 2011, JP Morgan expanded its reach to many more markets, including providing enhanced local currency funding.
“We continue to have a dialogue with global clients about their most pressing needs and this has resulted in continually improved product offerings,” adds Betts.
JP Morgan has added supply chain finance management functionality to its proprietary web-based platform that provides capability across the 30-plus markets where the bank supports supply chain finance transactions.
“We have added capability to support our seller-led receivables purchase proposition in addition to the buyer-led supplier finance product, all on a single global platform,” Betts explains.
For today’s sophisticated corporates, success depends on effectively managing the complex supply chains, which are an essential feature of global trade. According to Betts, JP Morgan will continue to provide supplier finance solutions that result in more efficient operations, minimised inventory carrying costs and reduced expenses.
“Supply chain finance is now the world’s fastest growing trade finance option. We expect to help more companies introduce supplier finance, and other financing solutions, into their organisations.”
Best structured commodity finance bank
Deutsche Bank has maintained its leadership in the market and once again secured the top spot as the best structured commodity finance bank.
The first half of 2011 saw competition for mandates returning, and Deutsche Bank was successful in securing finance mandates for the likes of Evraz, Metalloinvest,
Rosatom, Kernel, Metinvest, NLMK and Bashneft.
“We managed to maintain our lead position by securing the mandates we wanted,” says Kris Van Broekhoven, managing director, head of structured commodity trade finance, Emea at Deutsche Bank in London.
“This was helped by the support we gave to our clients during 2009/10 when many borrowers were dealing with the global economic downturn and a number of banks were more focused on sorting out their own problems than those of their clients.
“Unfortunately, the market turned again in summer, when funding costs rose sharply and certain large structured trade and commodity finance banks started shrinking the balance sheet.
At Deutsche Bank we however remained open for business and even purchased some of the assets on offer.”
During the year, Deutsche Bank endeavoured to move the market from club deals to genuine syndication, as was evidenced in the US$3.1bn pre-export finance facility for Metalloinvest and the €400mn borrowing base financing for NLMK Sales Europe.
“2011 also saw us become more active in Africa, Asia and the Americas, all regions where we expect to do even more in future,” says Van Broekhoven, noting that the bank will continue to grow the business in regions where it has traditionally been less prominent.
“We see no reason for this business to slow down,” he adds.
Best trade finance bank in Latin America (including the Caribbean)
GTR readers have once again voted BBVA as the best trade finance bank in Latin America.
BBVA’s success is put down to its extensive network of banks across the region.
“In almost every country where BBVA is present, we have teams dedicated to trade finance activity which leverage our respective local networks,” comments Davide Albagli, executive director, head of Europe (excl. Spain), structured trade finance.
In terms of the bank’s ability in its trade finance business, BBVA has participated in an ever-increasing number of transactions.
It has also been building up its export finance capability and has been involved in some headline-hitting export finance deals including a Cesce-backed deal for the Republic of Guatemala related to the Construccion del Sistema de Vigilancia y Proteccion de la Biosfera de Guatemala; which involved the export of radars to Guatemala used to monitor routes used by the narcotics trade; a Sace-backed pre-export financing in favour of Vale in Brazil and a UK Export Finance-backed deal to Petrobras.
In December last year, BBVA led a syndicate of banks to lend the Venezuelan national steel company (EPSSN) €480mn to finance machinery. This portion of the total project is insured by Euler Hermes, and opens up the possibility of funding other operations with export credit guarantees in this market.
Looking at what 2012 holds, Albagli remarks that the biggest challenge will be for BBVA to maintain its leading position in the trade finance market in Latin America.
“This will require us to keep improving our trade finance offering to our very demanding customer base by continually adapting our market approach and business model in trade finance to meet the changes that the financial markets will go through in 2012.
In the forthcoming years these challenges include the turmoil in the European sovereign debt crisis, the new regulations of Basel III and their impact on trade finance-related instruments, the diversification of funding sources, and higher competitiveness from other financial products,” he remarks.
Best trade finance bank in South Asia (including India, Pakistan, Bangladesh & Sri Lanka)
GTR readers have voted Standard Chartered as the best trade finance bank in South Asia for 2011.
South Asia (excluding Pakistan) contributed around 14% of the bank’s global trade revenues on a booked basis last year. Apart from this, trade also contributes significantly to revenues in the bank network by originating deals in the corporate and banks segments.
Deals of note for 2011 include: an A$160mn complex standby letter of credit confirmation deal for ICICI which is the largest single-deal revenue generated for a transaction by the Standard Chartered team in India; arrangement of a US$50mn import finance facility for Shree Renuka Sugars Dubai to cover its imports from Brazil; an avalisation for Bangladeshi mobile telecoms firm BanglaLink with deal revenues in excess of US$500,000; a US$50mn export facility for Alok Industries, India’s largest fully integrated textile company with a dominant presence in the cotton and polyester segments; and US$150mn of working capital facilities for National Aviation Company of India (Nacil), India’s national airline.
The focus is certainly not all on India alone. Standard Chartered has a strong trade business in both Sri Lanka and Bangladesh with a complete product suite on offer to clients. “Both these countries have delivered solid growth in the last two years and look well positioned to leverage the fantastic growth opportunity across the region,” says Dinesh Khanna, regional head of transaction banking for South Asia at Standard Chartered.
Looking ahead to 2012 and beyond, Khanna says Standard Chartered will concentrate on the basics in South Asia: “We shall focus on our flows business. This would mean getting the right risk-adjusted return from clients and quality coverage for a select set of clients rather than covering a large set of customers sub-optimally.”
“We aim to build further on our position as advisors to our clients for local business, especially when they invest or set up an office overseas. This is in line with our focus on key trade corridors that will help us tap the growing flows between South Asia and China, Africa and Middle East. We have already seen success with the Mena corridor,” he adds.
Best trade finance bank in Asia Pacific
Asia Pacific is one of the most significant regions for trade services for Citi and generates one third of global revenue for the bank. This has been recognised by GTR readers as Citi wins the award for best trade finance bank in Asia for 2011.
India, South Korea, China, Singapore and Hong Kong account for 80% of the bank’s trade business. Taiwan, Vietnam, Bangladesh, Indonesia and Japan are
also significant.
One deal that stood out for the bank during the year is the completion of a US$200mn debt financing arrangement, supported by Japan’s Nippon Export and Investment Insurance (Nexi) for transmission projects of National Power Transmission Corporation (NPT) in southern Vietnam.
The landmark transaction was the first official agency-backed financing deal ever arranged for NPT in the international capital market and was also the first Nexi untied loan for large-scale power transmission projects in Asia.
The deal provided NPT with an innovative financing solution amid difficult market conditions, especially for the power sector, and showed how agency-backed financing remains a key tool for obtaining long-term, stable, cost-effective funding of large projects in Asia.
Citi’s priorities remain a focus on asset distribution to leverage credit appetite and enhance returns, continuing to enhance supply chain product capabilities, strong origination focus targeting the appropriate solutions for respective industries and clients, continuing to develop its Singapore hub for its financial institutions business and the bank’s focus on agency-backed solutions.
“It is a very exciting juncture in Asia Pacific as the growth of trade flows, both inter and intra-regional, provide the backdrop for growing demand in the marketplace. In this current environment clients are increasingly turning to experienced providers, like Citi, for end-to-end trade solutions to connect with their key partners,” says Ravi Saxena, regional head of trade, Asia Pacific, treasury and trade solutions, global transaction services, Citi.
“Growth in trade for Asia will likely outperform GDP growth – and thus trade finance will be important to our clients.”
Best trade finance bank in Australia and the Pacific
It comes as little surprise that ANZ wins best trade finance bank in Australia and the Pacific. The bank has a long pedigree in the business and has been aggressively pushing its trade finance offerings in the wider region of late.
However, mention should also go to its domestic peers Commonwealth Bank and National Australia Bank, both of whom received respectable levels of votes.
Central to ANZ’s self-styled super-regional strategy is to follow trade and capital flows between Australia and the Asia Pacific region in particular.
The Australia-Pacific region cannot be looked at in isolation without this Asia link when talking about its traders, importers and exporters.
Australia is riding an enviable wave of stability, with strong industries such as natural resources, fisheries and agriculture allowing it to be a key player in export markets globally, while its proximity to growth markets in Asia is a definite advantage. Its stable government, established infrastructure and well-run economy are all
points in its favour.
“We are in a period of economic growth where we are seeing substantial increase in trade flows between Australia and the region, driven in no small part by the region’s strong demand for Australia’s soft and hard commodities,” says Alan Huse, head of trade and supply chain, Australia.
“Supporting these trade flows are movements of capital, focusing on three dominant industries: natural resources, agribusiness and infrastructure. Greater China is obviously a major market but we are also seeing strong growth in flows to and from India, Southeast Asia and the continuing presence of South Korea and Japan.”
ANZ’s trade finance business is clearly at the heart of this super-regional strategy – helping its clients both in Australia and the wider region manage the risks, liquidity and processing associated with these increasing trade flows.
“Our plan is to be the leading trade finance bank in the region, supporting our clients through our extensive presence and global platform, with superior insights into trade processing and market conditions,” says Huse.
Best trade finance bank in the Middle East & North Africa
HSBC has been crowned best trade finance bank in Middle East & North Africa (Mena), as voted by GTR’s readers.
“I believe HSBC won a significant amount of votes by virtue of the fact that we have a very strong trade proposition,” notes Tim Evans, head of trade and supply chain for the Middle East and North Africa at HSBC.
“This is in part due to our heritage in trade, our global footprint, and our strategy of keeping close to our customers through understanding their needs and talking to them regularly about the issues that impact their business.”
He adds: “Like all businesses today, trade finance asks a lot of all of us and of our team members. No matter how much we do as a bank, we know that our customers will always want more – greater value, a more sophisticated service, and maximum convenience for minimum trouble. We believe that we have the right people and the right brand to stay in the lead on all these fronts. Our efforts to achieve this have been reflected through winning the GTR award for being the best trade bank in the Mena region.”
Looking to the future, Evans believes that the greatest cause for concern for his team is the global economic environment and the negative impact it could have on trade flows. More specifically in the Mena region, HSBC will continue to monitor how the geopolitical landscape will evolve following last year’s uprisings in Tunisia, Libya and Egypt.
“2011 was a year of significant political change and we continue to monitor what impact this will have on performance of the region,” he adds.
Best trade finance bank in Sub-Saharan Africa
With Africa as its core region and with a steady focus on natural resources, Standard Bank was well-placed to be named best trade finance bank in Sub-Saharan Africa as voted for by GTR readers.
Competition amongst African banks has certainly kicked up a notch over the last year, and Standard Bank puts its win down to the bank’s competitive geographic footprint, which enables it to connect African economies within Africa, and to tap into the multitude of cross-border transactions.
Throughout the year, the bank’s teams have continued to conclude deals in the energy, mining and agriculture sectors. Highlights have included trade finance transactions for clients who have subsequently come to consider Standard Bank as their major bank.
The geographic spread of trade business includes transactions in Kenya, Mozambique, Malawi and South Africa, as well as prominent Nigerian and Ghanaian deals.
“These are all countries where the bank has a presence and would expect to transact, but Standard Bank has also been successful in African countries where the bank is not physically present,” says Craig Polkinghorne, Standard Bank’s global head and director, structured trade and commodity finance.
But the bank’s success has not been plain sailing. Volatile economic conditions, particularly towards the latter part of the year, have influenced client expectations in terms of their funding requirements.
“The changing global economic climate has played havoc with client liquidity forecasts and this has impacted their need for trade finance solutions.
In addition the volatility has affected pricing and management of expectations in that regard,” explains Polkinghorne.
This has led to the take-up of transactions being slower in some cases, though the bank reports that the number of transactions closed accelerated in the second half of 2011.
“Fortunately the bank has had the risk appetite and financial resources to support transactions linked to its targeted African markets, and this has proved to be beneficial for the teams focused on the African countries in which the bank operate,” Polkinghorne adds.
Best trade finance bank in the Nordic region
SEB has been named best trade finance bank in the Nordic region for the fourth year running.
The Swedish bank’s continued success is down to its ongoing recruitment drive and expansion across the trade finance market, according to Patrik Zekkar, SEB’s head of trade and supply chain finance, GTS corporate Sweden.
“Without a doubt it is the rapid development of our sales people within cross-transaction banking, such as trade, cash and receivables. We now have the ability to build state-of-the-art client management tools through the financial supply chain.”
SEB continues to expand its presence and in August last year, the bank opened its first Hong Kong office as a response to the Asian market attracting Nordic and German clients.
“The Asian market is of growing importance for an increasing number of our clients. Coincidentally Hong Kong has developed into one of the world’s financial centres and this license will further strengthen SEB’s presence in the region,” says Carl Christensson, head of SEB in Hong Kong.
The bank now has offices in Beijing, Singapore, Shanghai and New Delhi, and estimates that the number of staff in Asia by the end of 2012 will reach 170.
Continuing its success this year, SEB recently received a credit upgrade from Standard & Poor’s. Its long-term rating was upgraded from A, to A + with
stable outlook.
Looking ahead, the bank says it hopes to provide its customers with competitive and innovative trade services within the current uncertain market conditions.
“It’s tough for our clients, and our expectation is that will things will not get easier. Under the current conditions, SEB sees its mission to support the industry. We cannot afford to isolate trade finance as an independent issue. We believe it’s necessary to put effort into understanding the complexity of every part of the client supply chain in order to be a contributing supplier.”
Additionally, the bank says it will continue to work with its clients to develop client processes and flow management, while optimising its processes, working capital and risk.
“For us and the rest of the banking industry, it’s just the beginning of the journey,” Zekker states.
Best trade finance bank in West Africa
FBN Bank (UK) has won the award for best trade finance bank in West Africa. GTR readers clearly recognised the growing strength of the bank in the region, particularly after the creation of the structured trade and commodity finance team in 2009.
It is the third year in a row that the bank has won this accolade, which is testament to the team’s consistency in providing reliable sources of trade financing West
African borrowers, as well as other borrowers across the Sub-Saharan region.
The bank is predominantly focused on Sub-Saharan African trade and project related business ranging from letters of credit confirmation, discounting numerous financial institutions to arranging and structuring large multi-country, multi-commodity bilateral pre-shipment, pre-export, storage or borrowing base facilities. The bank aims to support its clients throughout their supply chain.
According to John Vowell, director, structured trade and commodity finance, his team puts its success down to a few core attributes, such as; “a sound on-the ground local knowledge of the 20 or so countries where they are active, flexibility in adapting to its clients’ ever-changing supply chain needs and an immensely supportive network within the bank from senior management, credit to the project management team”.
He adds: “The award is a real team effort from everyone within the bank at every level.”
Looking towards 2012, FBN Bank (UK) is well-positioned to further carve out its market share in West Africa as many previously strong European banks begin to curtail their activity in the region due to internal problems and a lack of liquidity.
The market also has confidence in the future growth of FBN, as demonstrated in mid-2011 when the bank successfully won a US$75mn syndicated facility
raised via mandated lead arrangers Standard Bank and Citi.
The one-year loan is intended to support the bank’s trade projects throughout Africa.
Best trade finance bank in North America
Bank of America Merrill Lynch (BofAML) has been voted the best bank in North America; the bank’s first triumph in GTR’s readers’ poll.
“From the expansion of our product line to entry into new markets, everything we do is driven by our clients and our mission to meet their needs and exceed their expectations,” says Bruce Proctor, the bank’s managing director and head of global trade and supply chain finance.
“The depth and breadth of our client relationships across the large corporate and commercial segments is expansive and we provide a broad range of offerings to help them grow and succeed.
As our North American clients conduct business overseas, they count on us for our global network and coverage. Our local experts around the globe provide knowledge and solutions that are customised to meet the unique needs of individual markets,” Proctor continues.
2011 was a year for growth for BofAML’s trade business. The bank’s supply chain finance programme, which started in 2006, reached a milestone last year with a 40% year-on-year increase in outstandings.
The bank increased the number of buyers in its programme by over 60%, with the majority of them being US-based companies with suppliers around the globe.
BofAML has also expanded its structured and trade finance business network and product offering to support its clients’ export growth. The bank has the highest delegated US Exim lending authority, and is a leading user of its working capital guarantee programme.
Over the past year the bank’s trade team has grown significantly. Substantial investments have also been made in technology, highlighted by the launch of Trade Pro, BofAML’s trade management portal, which allows clients to effectively manage their global supply chains and optimise working capital.
“BofAML intends to grow and evolve to be a top five global leader in trade and supply chain finance over the next few years,” says Proctor. “We will be a leader in providing creative solutions, intellectual capital, and the global resources to help our clients succeed.
We continue to take the lead from our clients as we pursue this goal.”
Best trade finance bank in Eastern Europe
UniCredit has won the award for best trade finance bank in Eastern Europe for the third year running.
Andrew England, UniCredit’s head of global transaction banking for Central, Eastern Europe says that the bank prides itself on the breadth of its products and the ability to tailor a range of solutions in a more comprehensive way than most of its competitors.
“UniCredit has a deep and far-reaching presence throughout Central and Eastern Europe and this allows UniCredit to be close to its customers and better understand and support our clients in challenging times.
Our offerings to corporates ranges from the most traditional trade finance products to highly innovative business solutions, such as supply chain finance,” England adds.
According to Claudio Camozzo, UniCredit’s head of transactional sales and trade services, another factor contributing to UniCredit’s success in Eastern Europe is its global transaction banking strategy.
“We monitor and control all key elements of product offerings along the value chain of our customers. Our competitive trade finance products offered on the origination side fully depend on a successful risk distribution on the other side and vice versa. The two awards we have received confirm this concept.“
The bank’s future goal is to continue expanding and developing its solutions. “We want to become the first bank of choice for our customers by promptly and efficiently supporting them in developing successful foreign trade strategies,” Camozzo says.
Best forfaiting institution
UniCredit has been voted the best forfaiting institution in GTR’s annual poll.
According to the bank, the success of UniCredit’s forfaiting business is down to its large network, local know-how and prime position as a European bank with market positions in Italy, Germany, Austria, Poland and a strong presence in the CEE countries.
UniCredit’s global head of structured trade and export finance, Angelo Rizzuti says: “UniCredit has been a reliable partner in the field of forfaiting for both corporates and financial institutions for many years – especially during the financial crisis when some market participants basically withdrew from this business.
Our clients benefit from several advantages like provision of immediate liquidity, balance sheet optimisation as well as the transfer of risks to the bank.”
Indeed, Rizzuti explains that the way UniCredit dealt with market conditions both during and after the crisis has helped carve out its reputation in the market. The conditions also created a favourable environment for products such as receivables finance and forfaiting.
“The demand from clients for these products has increased; the sale of trade receivables on a non-recourse basis is the only way to generate liquidity and mitigate risk at the same time,” Rizzuti adds.
UniCredit has also proved it can meet clients’ needs in the current challenging economic environment through the delivery of its risk mitigation instruments, such as private risk insurance, which strongly contributed to the closing of many deals last year.
The future of forfaiting in the trade finance market looks bright. Markus Wohlgeschaffen, head of global trade finance and services explains: “As open account transactions are playing a growing role in international trade, corporates want banks to not only finance their deferred payment periods, but accompany them through the whole supply chain.“
Due to scarce liquidity in the interbank market and new stringent regulatory requirements, banks will have to seek alternative ways to provide liquidity, Wohlgeschaffen says. “And this is where the forfaiting secondary market will play an important role: to package our funded trade finance business in such a way, that it attracts new investors.“
Best factoring house
GTR readers have voted Fimbank the best factoring house for the third year running. According to the bank, its continuous success is down to its ability to tap into niche emerging markets coupled with finding the right local partners in the target countries.
Over the last year, Fimbank has brought significant factoring services to the market, including the launch of joint venture India Factoring and Finance Solutions, which focuses on SMEs in the manufacturing, trading, exports and service industries.
Commenting on the new venture, Sudeb Sarbadhikary, Fimbank’s India Factoring CEO says: “SMEs are at the heart of India’s growth story. Factoring works as an additional key driver enabling SMEs to grow and move forward at an even faster trajectory.”
Other achievements include Fimbank’s entrance into the Brazilian market with its newly-opened factoring company BrasilFactors. With the Brazilian market currently promising excellent trade finance opportunities, the new company aims to increase access to finance for SMEs, and in turn integrate smaller producers into the supply chain.
BrasilFactors chief executive officer, João Costa Pereira says that although the Brazilian economy is one of the fastest growing in the world, SMEs in the country generally have “limited access to funding and sophisticated trade solutions”.
He continues: “BrasilFactors aims to help fill this gap with short-term funding against receivables and solutions such as risk protection and collection services for both domestic and export transactions.”
Looking ahead, the bank believes that its biggest challenge will be managing the risks and liquidity in the current demanding economic environment.
In terms of its factoring abilities, Fimbank says its main focus will be to ensure the successful turnaround of its joint venture in Dubai, Menafactors which was launched in November 2007.
Additionally, the bank aims to maintain a solid position of another of its joint ventures, Egypt Factors in light of the country’s recent political unrest.
Best Islamic trade finance bank
GTR readers have once again voted the International Islamic Trade Finance Corporation (ITFC) the best Islamic trade finance bank, making it the bank’s third consecutive win in this category. 2011 has been a tough year for trade finance institutions, and the ITFC is one of many banks that have had to overcome various difficulties, including the Arab Spring and ongoing political uncertainty in the Arab countries.
“The events of 2011 have largely affected the business environment in a negative way. In addition to causing turmoil in the markets, economic operators inneighbouring countries suffered as well due to reduction, and in some cases, complete halt of trade flows,” ITFC chief executive officer, Waleed Al-Wohaib states.
The implementation of Basel III is another cause for concern for trade finance banks.
Al-Wohaib continues: “While the Basel III rules are designed to make banks more resilient and prevent a repeat of the financial crisis, several provisions combine to make trade finance, already a low-margin business, much less profitable.
Portions of the leverage rule, new risk-weighting requirements and the rules for liquidity raise the costs of trade finance unfairly for banks.” Such a combination could drive many smaller banks out of the market and prompt large banks to cut back their lending or de-leverage their trade finance altogether, adds Al-Wohaib.
The ITFC’s plans for 2012 include growing its structured trade finance portfolio in an attempt to gain access to new markets in difficult environments.
The bank also aims to enhance its consolidation measures for corporate governance, risk management and business processes.
“It is also important to come up with ideas and initiatives that will allow our institution to live up to its promises to deliver trade solutions to its stakeholders. ITFC is moving towards building a customer-centric model, which will enable us to outperform our competitors in the market,” Al-Wohaib says.
Best boutique trade finance institution
The London Forfaiting Company (LFC) has scooped the award for best boutique trade finance institution.
LFC has been one of the success stories in the market this year, demonstrating a consistently strong appetite for risk and solid liquidity capacity.
As Simon Lay, managing director at LFC, tells GTR; “At a time when many financial institutions are de-leveraging their balance sheets and taking a much more cautious approach to cross-border risk, LFC differentiated itself by remaining an active participant in the primary and secondary markets, providing liquidity and risk capacity during very difficult market conditions.”
He adds that the company does not have the same constraints that its competitors face, neither having regional limitations nor restrictions on what type of trade finance products they can offer.
“We provide a very wide variety of credit risks and financing structures, including not only post-shipment discounting, but also pre-shipment, bonding and guarantee facilities. LFC is active in both the loan and trade finance markets and can consider corporate, bank and government transactions. Such diverse risk capacity, structures and activity in both the trade finance and loan markets gives LFC a fairly unique approach to our clients,” he adds.
During 2011 LFC actually broadened its risk appetite.
“Our biggest achievement has been continuing to grow our portfolio risk diversity, size and profitability at a time when most banks were moving in a very different direction. This success culminated in 2010 being LFC’s most profitable year in the company’s history since being acquired by Fimbank in 2003. While it is too early to give specifics for the full 2011 year, figures at the interim stage were significantly improved over 2010 at that stage.”
Lay also believes that the economic climate could play into the hands of the boutique institution.
“The current conditions should provide some good opportunities for LFC. Exporters will be looking to find ways to mitigate the credit risks associated with their sales and banks will be anxious to manage their credit portfolios,” he adds.
Best trade outsourcing house
BNY Mellon has won the award for best outsourcing bank for a third year in a row; testament to the bank’s commitment to developing innovative solutions.
One of the bank’s notable achievements in the last year has been the launch of its LC relay service which allows issuing banks to expand trade processing to regions where they do not maintain branches.
The bank has also observed the success of its thought leadership e-mercial campaign, which has been breaking new ground from a media and presentation standpoint.
These accomplishments, combined with BNY Mellon’s numerous industry awards won in the past 12 months, indicates that the bank’s approach to trade finance has been very well received in the market.
“We have progressed from being viewed as a regional player to being recognised as a global industry leader,” says Dominic Broom, head of sales and relationship management for BNY Mellon Treasury Services, Emea.
“Our approach to local-global bank partnerships is based on collaboration and the two-way transfer of knowledge and expertise,” explains Alan Verschoyle-King, global head of sales and relationship management for BNY Mellon Treasury Services. “Through this we can gain real insight into our clients’ businesses and their evolving needs, which provides us with the information necessary to develop solutions in keeping with our client-centric ethos.”
Rather than expecting clients to fit the bank’s pre-set structure, BNY Mellon uses its shared knowledge to create bespoke solutions that fit the requirements of their clients, says Verschoyle-King.
He adds that BNY Mellon understands that regional banks are uncomfortable outsourcing to global providers that could compete for local corporate business.
“As a result we avoid targeting such business outside of our home market.”
BNY Mellon intends to continue its focus on the development of innovative solutions and on exploiting the knowledge gained from longstanding partnerships. “Such a focus allows us to continue to address the chief concerns of our clients, namely how to efficiently manage costs, mitigate risks and secure new revenue streams,” says Verschoyle-King.
Best trade credit and political risk insurance broker
BPL Global has been voted the best trade credit and political risk insurance broker for three years running.
BPL Global has made credit and political risk insurance its speciality, which according to Charles Berry, chairman of BPL Global, is the driving force behind its continued success over the last 30 years.
“This means the whole company is focused on trying to ensure that the PRI market works for our policyholder clients. We would like to think that our specialisation has meant that BPL Global’s name has become synonymous with the private PRI market and its evolution over the last 30 years,”
Berry notes.
Since winning the award last year, BPL Global has opened an office in Hong Kong, representing the important first step in establishing its presence in the Asia Pacific region.
Another of the firm’s key focuses has been the development of specific areas in the PRI market, such as the integration of the stand-alone terrorism/political violence insurance market. However, 2011 hasn’t passed without its challenges.
“For the insurance industry generally, the global economic difficulties and the Arab Spring have been a sideshow compared with the succession of
natural catastrophes that have hit the industry in 2011.
Earthquakes in New Zealand and Japan, floods in Thailand; these catastrophes have each individually cost the industry tens of billions of dollars.”Yet despite these huge losses, Berry explains that the insurance industry is continuing to function normally, with “no hint of any bailout; not even a crisis”.
He continues: “The fundamentals of the insurance industry have never been more solid.
As a result, at a time when many industries are looking for support, we in the private PRI market are still fully able to fulfil our role of providing support to businesses engaged in trade and investment in emerging markets.”
Best trade credit insurance underwriter
In the midst of a testing period for the insurance market, Chartis has once again claimed top prize as the best trade credit insurance underwriter.
According to Neil Ross, trade credit regional manager, Europe, the greatest challenge has been the deteriorating risk environment and outlook for North Africa, Europe and other key markets.
“Soft market conditions in our business has continued despite the risk outlook, however we are committed more than ever to providing a quality, non-cancellable insurance product because we know it works,” explains Ross.
The last 12 months have seen Chartis pushing forward its expansion into a number of new markets, including Brazil and Asia. The firm has also been working towards the continued development of policy and systems in order to better support trade finance.
Ross puts the firm’s win in GTR’s readers’ poll down to its ability to remain dependable. “We try to be consistent in tailoring effective, sustainable, long-term solutions for our clients. And we try to innovate.”
Over the coming year, the firm hopes to continue to be seen as the most “valued and innovative insurer in our market space with the ability to be an integrated global insurance provide executing anywhere our clients need us to be”, says Ross.
Best political risk insurance underwriter
Following on from the success of last year, Ace Global Markets has once again been voted the best political risk insurer of 2011.
The last 12 months have been very testing in respect of matching market conditions with the risk environment, explains Julian Edwards, the firm’s head of product line, political risk and credit. Nevertheless, Ace Global Markets has been able to navigate through the challenges brought about by the current risk environment to meet its aims without compromising its underwriting strategy.
The firm has also made good progress on structured trade credit recoveries emanating from claims attaching to the beginning of the crisis. “This helps demonstrate that the product works when written in the correct way, supporting good clients,” says Edwards.
The biggest challenge to Ace’s business has been the re-emergence of the credit crisis, coupled with the sovereign debt crisis in Europe.
“The cost of US dollar funding for European banks has had a major effect on the availability of trade finance, which is where we usually source our everyday business,” notes Edwards.
“We have had to realign our strategy to focus more on traditional corporate political risk business and use our regional hubs to pick up on the increased trade finance activity in North America and Asia.”
The firm’s immediate goal is to navigate through 2012, which, Edwards believes, will be a defining year when Ace will have to make some difficult decisions. On a positive note, the firm is looking to increase its distribution platform and add another underwriting hub in Brazil, where it have recently applied for political risk insurance and credit licences. “This will increase our ability to take advantage of the increasing south-south trade opportunities,” says Edwards.
Best development bank in trade
GTR readers voted the African Development Bank as the leading bank in helping support trade flows within and out of the African continent.
Compared to its peers, the bank does not run high-profile trade finance programmes; however the institution has been instrumental in supporting infrastructure development, African exports and inter-regional trade over the past 12 months.
In particular the bank pledged US$200mn to Côte d’Ivoire following the post-election conflict seen in the country in early 2011. The violence had resulted in exports of the country’s main crop, cocoa, grinding to a halt.
In late 2011 the bank reviewed its lending strategy by introducing the use of A/B loans. The aim of this move is to help mobilise financing from the private sector as well as encourage increased foreign direct investment in Africa, particularly as liquidity among commercial banks in Europe has started to dry up.
With the eurozone crisis sapping the lending capacity of the European banks in particular, the role of development finance institutions to encourage lending and investment into Africa is growing.
The bank already closed its first A/B loan in late October 2011 for South Africa’s Transnet.
AfDB’s involvement in the transaction ensured that the borrower secured a seven-year tenor. Achieving such a long tenor in US dollars would have been a potential struggle if the borrower had looked to raise a conventional corporate facility in South Africa in the final quarter of 2011.
Best trade finance software provider
GTR readers voted Misys as the best trade finance software provider in 2011.
Misys has been a leading force in the provision of trade and supply chain finance solutions during 2011. It has been a pioneer of solutions that help to support the convergence of cash and trade finance with banks.
“The long heralded trend towards transaction banking with the convergence of trade, cash and other corporate treasury functions has also become a reality for a number of Misys customers and we see huge demand in the market for 2012 for that ability to provide a unified view of those services together with true in-depth trade finance expertise,” comments Olivier Berthier, global solutions director, transaction banking at Misys.
Misys conducted a survey in mid-2011 that found that the consolidation of cash and trade businesses was continuing apace, with three out of four banks planning to form a single transaction banking business over the next year.
However, the survey also found that few institutions have successfully integrated their online channels, back-office operations and payment processing. This leaves Misys well-positioned to provide services to support this integration.
“Misys offers banks a unique proposition – a complete front-to-back office trade and supply chain finance solution that improves operational efficiency while making it easier for customers to do business with them.
“This combined with over 20 years experience working with trade finance banks means that our customers can be confident that they will always be supported by a partner that understands their business and has the ability to take them to where they want to be,” comments Berthier.
Misys has an integrated portfolio of trade finance solutions used by over 180 banks.
Best export credit agency
The Export-Import Bank of the US (US Exim) has been recognised as the best export credit agency (ECA) in GTR’s Leaders in Trade awards.
The stand-out feature that marks US Exim as the best ECA is its response to the international financial crisis, the bank tells GTR. “US Exim quickly developed new products to meet the needs of both lenders and exporters, such as capital market and supply chain financing. We also reduced our transaction processing time to 30 days.”
The agency has had a successful year, starting with the launch of its express insurance and supply chain financing scheme in April.
“The scheme is a streamlined application for a policy quotation and two foreign-buyer credit indications of up to US$300,000 within five business days. We obtain credit information on foreign buyers and make the credit decision. This helped small businesses expand into new markets and add foreign buyers. In 2011, we approved over 100 express insurance policies,” US Exim says.
The agency has also achieved a number of milestones this year. In May 2011, it financed two transactions in Sub-Saharan Africa (with state-owned electric utility Eskom and RwandAir Express) bringing its fiscal year financing to US$1.3bn for the region – nearly double the previous one-year record of US$812mn in 2010.
Additionally, US Exim has also increased its volume of exports for renewable energy from US$30mn in 2008 to US$726mn in 2011.
For the year ahead, the agency aims to support the US government’s national export initiative, and will continue its efforts to double overall US exports by 2015, while creating more American jobs.
US Exim will also continue its efforts to provide trade financing support for small business and increase its infrastructure and renewable energy financing.
“The bank is committed to meeting the global need for infrastructure financing for the export of equipment and services and capitalising on new opportunities available to US companies,” the bank says.
Best trade facilitation programme
This year sees the introduction of a new award for multilaterals and development banks, designed to recognise those institutions which have played a key role in supporting and facilitating trade finance flows.
GTR’s editorial judging panel felt that this year it was appropriate to nominate the IFC as winner of the best trade facilitation programme award.
In recent years there has been an increasing need for multilaterals to plug the gap in the provision of trade finance, whether that be by providing extra liquidity or additional risk capacity.
The IFC has been at the forefront of developing specific trade finance facilitation programmes since the launch of its global trade finance programme (GTFP) in 2005.
Since then the IFC has developed new programmes and tools involving warehouse finance, structured commodity finance and supply chain finance to help trade finance banks weather the economic storms of the past few years.
Yet it is its established GTFP that has played an instrumental role in the market. Under this programme, the IFC offers confirming banks partial or full guarantees covering payment risk on banks in the emerging markets for trade-related transactions.
Such is the demand for the GTFP’s guarantees, the IFC announced in November last year that it would increase the programme by US$500mn.
To support this expansion, the IFC secured a trade credit insurance policy brokered by Marsh and underwritten by nine leading insurers.
The new policy aims to ensure that the IFC can continue to provide trade finance to the world’s poorest countries at a time when many banks are pulling back on their trade finance lines due to regulatory requirements and financial uncertainty.
Commenting on the award, Georgina Baker, director of short-term finance at IFC, says: “IFC is playing a leadership role in driving global trade through the GTFP and creating lasting partnerships that are bringing economic growth and job creation to some of the world’s poorest countries.”
“This new facility brokered by Marsh will help our partner banks to increase their business with small and midsize firms in emerging markets and enable trade that otherwise would not have happened.”
Best bank for documentary processing
GTR readers have once again recognised RBS as the best bank for documentary processing in the annual readers’ poll.
This is the second time that RBS has scooped the award, and according to RBS global head of trade products, John Bujega, it is because documentary processing remains one of the most important components of the bank’s overall letter of credit and collections service offering.
Demonstrating this, the bank launched its new web-based document checking utility at Sibos last year.
The Docxam service allows firms to outsource trade document checking processes to RBS through a web-based platform. The bank then reviews and evaluates the paperwork for potential problems, including discrepancies and errors which can potentially slow down the trade process.
Bujega adds: “We have invested in technology solutions to deliver these services more efficiently to our clients as well as putting the operational teams responsible for reviewing and processing these critical trade documents through ongoing formal training and development programmes.”
In order to maintain its status as the market leader in documentary processing, the bank aims to continue investing in its work force to ensure staff are up-to-date on the new documentation technology trends.
“RBS is a global industry leader and we have the largest number of certified documentary credit specialist staff; this important certification requires trade staff expertise and awareness of global documentary polices and trade terms development. The combination of our technology investment and staff development are two major factors that have contributed to RBS winning this award two years in row,” says Bujega.
