2012 will be remembered as a landmark year for the GTR Leaders in Trade awards. Clients of local and international financial institutions did not miss the chance to recognise great service, and the number of votes gathered hit a record 6,000.
Markets worldwide are changing as a result of the financial crisis and the evolving regulatory environment, and this is reflected in a number of new categories added to the awards. Africa’s economy is one of the fastest-growing in the world, and it has become necessary to divide our categories into four regions: Middle East and North Africa, Southern Africa, West Africa and the newly-added East Africa. Similarly, the former Eastern Europe category is now split between Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS), reflecting the diversity of the trade finance sector.
Finally, for the first time this year GTR is adding a corporate to its award winners. The ‘best in-house trade finance business’ category, launched upon request from corporates themselves, is a testimony of how resourceful companies have become over the past couple of years, creating bespoke solutions to optimise their own supply chains.
The results of this year’s GTR Leaders in Trade awards are published over the following pages, and celebrate the continued success of an industry that, despite repeated financial crises, still strives to offer the best to its clients.
Best global trade finance bank: HSBC
HSBC has once again been voted best global trade finance bank by GTR readers. James Emmett, global head of trade and receivables finance at the bank comments on how HSBC’s strategy has helped its success over the past year:
“International business is at the heart of HSBC’s strategy and our footprint covers 77% of world trade, which means we are well placed to connect customers to emerging opportunities. Last year we took the important step of bringing our trade and receivables finance businesses together, to support customers throughout their trade cycle.”
In 2012, HSBC took the lead in promoting Rmb-denominated trade transactions, particularly in the UK and India. It also used its SME fund to support small businesses in the UK and the United Arab Emirates, and reopened its representative office in Libya, leading the way back into the country. The bank expects the next few years to be critical in the evolution of trade finance towards a more supply chain-oriented service, and hopes to help companies in developing markets manage their payments more efficiently. Emmett adds that supply chain finance will soon have to go beyond simple discounting of receivables by large European or American corporates, as the bulk of future trade flows are expected to be between emerging economies. In fact, HSBC predicts that export growth will be strongest in India, Vietnam and China, followed by Mexico and Argentina.
“This award is a testament to our people and our focus in 2013 will remain on supporting customers with the trade finance advice and solutions they need to help their business thrive,” he concludes.
Second place: Deutsche Bank
Best global export finance bank: Citi
Citi has been recognised as the best global export finance bank by GTR readers. Valentino Gallo, global head of export and agency finance at Citi transaction services, says 2012 has been a year of diversity for the bank: “We have supported clients from all regions, raised funds in the bond markets and international and local bank markets, and expanded our emerging market ECA business with new deals done with the support of ECAs from Asia, Eastern Europe, the Middle East and Africa.
“From an industry perspective, we have been particularly active in the financing of transportation infrastructure, offshore and renewable energy projects and aircraft.”
Notable transactions Citi signed in 2012 include the US$675mn financing for the Al Sufouh Transit System project arranged for the Roads and Transportation Authority of Dubai (backed by Coface and ONDD); the US$512mn financing for the subway system of Panama City (supported by Coface and Miga); and the US$440mn China Exim co-financing facility for Seadrill of Norway. Citi also arranged airline financings guaranteed by US Exim as well as European agencies.
“We have always paid attention to the liquidity of the asset class as well as the loan portfolio churn rate. The massive deleveraging of the banking sector in Europe has caused a serious loss of liquidity which significantly impacted the export finance market, especially for the US dollar-denominated loans. We have been able to expand the investor base to banks who had never invested in export finance before as well as to non-traditional investors. We also managed to get several agencies to introduce funding and refinancing programmes for banks, which has significantly alleviated the liquidity issues in the market,” Gallo adds.“Agencies and clients are telling us they see value in our long-standing structuring and execution expertise, as well as in the access to Citi’s global network, which greatly facilitates the collaboration among exporters, importers, export credit agencies and lenders.”
Second place: HSBC
Best global commodity finance bank: Deutsche Bank
Deutsche Bank has been voted as GTR readers’ top global commodity finance bank in 2012. For John MacNamara, managing director of structured trade and commodity finance at the bank, the award is “recognition of the efforts we have made to broaden our commodity trade finance product offering since the formation of our commodity trade finance committee one year ago”.
MacNamara says that the bank’s greatest achievement in this area during 2012 has been its ability to continue obtaining credit approvals in tough times. He tells GTR: “This is particularly notable in the context of Basel III. We’ve also continued to obtain structures, even vanilla facilities that comply with all rules to which we are subjected to these days. Considering the ongoing market and regulatory challenges, it’s very gratifying to receive such a rapid and warm market reception and it’s proof that Deutsche has thrown down the gauntlet to become the leading provider in this space.”
GTR readers will no doubt have been impressed by the breadth of the bank’s coverage throughout 2012, both in terms of commodities and geography. In November, Deutsche was the mandated lead arranger and sole bookrunner for a syndicated loan of €400mn, made to international metals firm Nyrstar for the refinancing of its multicurrency structured commodity trade facility. In October, the bank gave China-based Tangsteel a loan of US$200mn, to facilitate the pre-payment of its exports to steel trader Duferco in Singapore and Switzerland. A month previously, the bank extended a three year US$110mn bilateral term loan facility to Azerbaijan’s state-run oil company, Socar – the fourth such arrangement it entered with Socar since 2009. It’s been a busy year for this part of Deutsche’s business.
Second place: ING
Best structured commodity finance bank: ING
GTR readers have voted for ING Bank as the best structured commodity finance bank for 2012. Managing director Bernard Zonneveld says the bank’s longstanding presence in key markets, in-depth understanding of its customers’ business, predictable risk appetite and high-quality delivery are behind its continued success.
But there were a number of standout achievements in 2012, which help explain why readers felt ING were deserving of this accolade. Zonneveld says: “We have been able to lead or co-lead a number of interesting transactions across various sectors, including a co-lead role for Mechel’s refinancing in excess of US$1bn; we were the sole co-ordinator of a pre-export financing for Gazprom Neftekhim Salavat. We were also mandated lead arranger and facility and security agent in a US$220mn pre-export financing for Kirovo Chepetsk Chemical Works.”
For Zonneveld, the main challenge of 2012 was the pressure on commodity prices and producer margins. He tells GTR: “The upstream oil and gas sector was the notable exception, but the pressure resulted in significantly lower levels of investments (including in M&A) and reduced financing requirements. Although the final four to five months of the year saw a flurry of activity across the sectors, it is no secret that overall the number of deals closed in the market to date is less than a year ago. But the pipeline for Q1 2013 looks very promising.”
As for the future, Zonneveld says: “We are looking to expand our position as preferred bank and trusted advisor for a steadily increasing number of counterparties in the commodity and natural resources sector in key geographic markets. Our new franchise in Sao Paulo, started at the end of 2011, has shown great results in the first year of its existence, and the expectations are even higher for 2013.”
Second place: Deutsche Bank
Best trade finance bank in Latin America (including the Caribbean): BBVA
BBVA, the best bank in Latin America as voted for by GTR readers, successfully closed over €1bn of trade finance transactions worldwide throughout the course of 2012. “At BBVA structured trade finance, we have been able to leverage our global franchise and outstanding structuring skills, to overcome very tough market circumstances,” says Sandra Nolasco, the bank’s global head of structured trade finance.
Despite the harsh environment, the bank has continued to deliver robust and recurrent results. “First, we implemented a strict asset allocation strategy – with a clear customer-centric focus. Second, by making our execution teams more efficient, we were able to capitalise on the BBVA capillarity in LatAm by servicing a broader range of customer segments from global corporates to the large middle market, and finally, by investing in product development, we were able to increase the weight of high-value added, low liquidity trade products in our portfolio,” says Nolasco.
Nolasco adds that the bank is particularly proud of a Cesce-covered guarantee facility signed in October with Spanish infrastructure firm FCC for the issuance of its contractual bondings. The US$450mn facility was the first of its kind launched in Spain.
Looking ahead to 2013, Nolasco confirms that trade finance is clearly an area where the bank wants to grow “and an area where we believe we can add a lot of value to our customers”.
“Our goal is to further enhance our global platform, to offer our customers a full range of trade services with a truly global value proposition,” she says.
Second place: Unibanco Itau
Best trade finance bank in Asia Pacific: Standard Chartered
Given that Standard Chartered has been present in Asia Pacific for over 150 years, it should come as no surprise that GTR readers have voted for it as the best trade finance bank in the region for 2012. The bank has placed a significant focus on growing its presence in the region, and has leveraged its networks in other emerging markets across the world – Africa and the Middle East, for example – to the benefit of its Asia Pacific clients.
For Ashutosh Kumar, Standard Chartered’s global head of corporate cash and trade, 2012 was a big year. He explains to GTR: “We were the first in the industry to facilitate a fully-automated end-to-end trade finance transaction via BPO for BP petrochemicals through our Straight2Bank platform. We were also the first international bank to facilitate two-way renminbi-denominated trade settlements between Hong Kong and mainland China. In August, we processed the first renminbi cross-border trade settlement transaction as the first foreign bank to obtain the settlement and agency bank licence in China.”
During a tough time, macroeconomically, Standard Chartered is one of only a few banks to have had its credit rating upgraded by all three rating agencies. Says Kumar: “A turbulent economic and regulatory landscape has seen the global financial markets continue to exhibit volatility this past year. Despite that, Standard Chartered has again demonstrated its strength at the heart of the growing trade flows in Asia. We have continued to support clients’ needs and our trade business has grown from strength to strength.”
Looking to the future, he expects this to continue: “Our ambition is to be the leading working capital bank in and for Asia, Africa and the Middle East.”
Second place: Citi
Best trade finance bank in CEE: UniCredit
GTR voters have elected UniCredit as the best trade finance bank in Central and Eastern Europe (CEE). “In spite of the marked economic and trade slowdown experienced in some countries in CEE, our unique combination of deep product offerings, superior trade finance professional advisory skills and broad reach in the region has allowed UniCredit in CEE to continue to record, in all the countries covered, a sustained growth in 2012,” says Claudio Camozzo, global head of transactional sales and trade services at the bank.
With the largest international banking network in CEE, UniCredit strives to be recognised for the quality of its customer service, he adds.
Over the past year, the bank increased its trade transaction volumes and reinforced its leadership in the region. Angelo Ruzzuti, head of GTB CEE, says: “With 15% more foreign trade transactions processed compared to last year, UniCredit is an unrivalled market leader in CEE. This is the result of process efficiency recognised in the market, but also of advising, structuring and financing capabilities offered to our domestic and cross-border clients by over 200 professionals, most of them CDCS-certified [Certificate for Documentary Credit Specialists].”
According to Ruzzuti, the bank’s strength resides in being able to listen to its clients’ needs. “With our profound knowledge of the CEE market and client base and highly-skilled trade finance specialists we can serve our customers’ needs best. We can combine unique, profound local knowledge with global expertise to provide cutting-edge solutions and create tailor-made products in a strategic dialogue with our clients,” he says.
Among its 2012 achievements, UniCredit participated in a €172mn syndicated loan to Croatian fast-moving consumer goods manufacturer Atlantic Grupa, which was part of a bigger, €307mn financing package. The deal was the biggest regional syndicated corporate loan of 2012.
Second place: Raiffeisen Bank
Best trade finance bank in the CIS: Sberbank
GTR readers voted Sberbank as the best trade finance bank in the CIS region in the first time that the Leaders in Trade awards have recognised this category.
Over the past three years, Sberbank has made a breakthrough in the field of trade finance, increasing its volume of transactions twelvefold and raising its portfolio to more than US$10bn. “These achievements gave the ground for the award, which justifies the chosen strategy for the development of the trade finance area,” says Andrey Ivanov, the bank’s global head of trade finance and correspondent banking.
Trade finance divisions are present at all 17 of Sberbank’s regional head offices throughout Central and Eastern Europe.
“Today Sberbank offers a full range of trade finance products in line with the international standards and pioneers the Russian market in promoting complex cross-border solutions, including supply chain finance, which is based on expanding the international presence of the group,” explains Ivanov.
Another business area of top priority for Sberbank is export credit agency (ECA)-covered financing, and the bank is particularly keen on aircraft financing, which will give Russian airlines access to long-term resources to renew the fleet.
“We are also pleased to highlight the recent establishment of the Russian agency Exiar in line with best international practices. The goal is to support Russian export and investments abroad by means of providing insurance to cover commercial and political risks. In partnership with Exiar we’ll offer new opportunities to Russian exporters and increase the competitiveness of Russian goods,” says Ivanov.
The bank’s foremost challenge over the past year has been to integrate its recently acquired banks into one unified Sberbank Group structure, while taking into account the variety of product lines and approaches to business development, as well as cultural and legal aspects.
“We have already made important successful steps in this direction and will continue to move forward as a group, providing new opportunities to our clients and partners,” Ivanov adds.
Second place: VTB Bank
Best trade finance bank in South Asia (including India, Pakistan, Bangladesh, Sri Lanka only): HSBC
With its significant Asian footprint and growth in Asian operations in the past year, HSBC has been voted best trade finance bank in Asia Pacific in this year’s readers’ poll.
Simon Constantinides, regional head, global trade and receivables finance, Asia Pacific, comments on what makes HSBC’s success in the region: “Our people understand that trade is the cornerstone of the economy and the driver of global recovery. Trade lies at the heart of HSBC’s growth strategy; we aim to double our trade finance revenues to US$5bn in the foreseeable future by supporting businesses as they trade internationally.
“HSBC stands out from the competition because of its impressive international network of on-the-ground experts in over 65 markets across the globe and 19 markets in Asia Pacific. Its long-standing presence in Asia and its ability to connect its customers with the opportunities created by its international reach and universal banking model have led to HSBC becoming the world’s largest trade bank, with a 9% share of bank-financed global trade.”
In 2012, HSBC signed several landmark transactions in Asia, including the first Rmb-denominated documentary credit for a Mumbai-based pharmaceuticals company, as well as India’s first Rmb-denominated trade deal. The bank sees India as a major hub for Rmb trade, and in that context has made a number of new appointments in its Indian and Asian teams, including its first head of China outbound, Li Zhen.
In October, the bank also launched its global liquidity solutions offering in Australia and Japan, in order to broaden the number of financial centres that corporates can use as international cash pooling locations.
Second place: State Bank of India
Best trade finance bank in Australia and the Pacific: ANZ
Once again, ANZ has been voted best trade finance bank in Australia and the Pacific. Mark Evans, ANZ’s global head of trade and supply chain, explains that the main reason for the bank’s success is its strong footprint in the region: “ANZ offers a proposition few other banks can match; a regional network of over 500 dedicated trade specialists on the ground in 28 countries providing end-to-end visibility, insight and support for our customers’ trade needs.”
In 2012, ANZ increased operations in the Pacific with several landmark deals.
“I am particularly pleased with the growing maturity of our business across the Pacific where we have completed some landmark deals for Fiji Sugar and the Timor Leste government. These deals bring important social benefits to each country,” Evans adds.
He points out that the bank also pushed its supply chain finance business over the past year. “I am also pleased with the progress we have made in the financing of our customers’ open account and supply chain requirements, bringing innovation while retaining the important controls associated with facilitating cross-border trade.”
Evans says that Australia’s banking environment experienced increased pressure and competition in 2012, which presented challenges for ANZ, but the bank managed to keep up by growing its trade finance business.
“In a business environment in Australia that has seen significant margin pressure and renewed competition, ANZ continued to grow volumes and market share.
“The trade business is continuing to grow as a cornerstone of ANZ’s super regional strategy.”
Second place: NAB
Best trade finance bank in the Middle East & North Africa: HSBC
For the sixth consecutive year, HSBC has scooped the award of best trade finance bank in the Middle East and North Africa (Mena). Tim Evans, regional head global trade and receivables finance, Mena, reflects on the bank’s success in the region:
“This is a direct reflection of the hard work, commitment and professionalism of our people. We always appreciate that our customers have a choice to bank elsewhere and therefore need to exceed their expectations of us if we are to be the leading international trade finance bank.”
In 2012, HSBC maintained its support to SMEs in the UAE with the launch of the third, US$27.2mn instalment of its SME fund. The first and second tranches of the fund were allocated within six and three months respectively, showing increased interest in cross-border transactions for UAE small businesses.
In March, HSBC acted as the structuring bank, co-ordinating arranger and mandated lead arranger on a 15-year US$1.4bn loan to Saudi Electric Company – the largest-ever ECA-backed corporate financing in Saudi Arabia – to develop the Rabigh VI thermal power plant on the Red Sea coast.
The bank was also one of the first banks to reopen its office in Libya following the political unrest that shook the country last year, and it says it is looking forward to playing its part in working with the new authorities and helping to return Libya to stability and growth. Most recently, HSBC was involved in a US$120mn syndicated loan with Dubai-based engineering firm Drake & Scull International. The financing will help the company in pursuing its growth plans in North Africa, Asia and other growth markets and will provide the liquidity to capitalise on public-private partnership projects, especially in the infrastructure sector.
Second place: Standard Chartered
Best trade finance bank in Southern Africa: Standard Bank
With a burgeoning domestic business in South Africa, and as proof of its strength in the region, Standard Bank has been voted the best trade finance bank in Southern Africa.
The bank’s growth continues despite the recent spate of rating downgrades for South African banks, the effects of which are likely to be more pronounced in the long term. Although the domestic banks are well capitalised, the downgrades are expected to increase the cost at which they raise capital, which in turn will raise the price at which they are able to lend.
Credit rating agencies cited overexposure to government debt, South Africa’s deteriorating economic outlook and liquidity challenges as the reasons for the downgrades.
Nevertheless, Craig Polkinghorne, Standard Bank’s global head and director of structured trade and commodity finance, tells GTR that the quality and size of the bank’s trade transactions has improved, and that as a consequence, its business is more efficient.
“Increasingly we are banking the trade flows that Africa has with other parts of the world, as well as the trade links within Africa. The teams have expanded their products and their jurisdictions, and considered transactions outside of where the bank has a footprint,” he explains.
One of Standard Bank’s success stories for 2012 was the string of loans it arranged for agribusiness Export Trading Group (ETG), which involved introducing the borrower to the international syndications market.
In June the bank acted as mandated lead arranger on a US$250mn one-year syndicated loan for ETG, which came just six months after it funded a US$100mn borrowing base facility for the company.
According to Polkinghorne, the bank is in the process of closing yet another syndicated transaction with three other banks.
“What I really like about the ETG story is that Standard Bank has taken a new trade finance borrower to the international markets. As a result the international lenders are better informed as to what an African trader does, and how they operate,” Polkinghorne adds.
Second place: Barclays
Best trade finance bank in East Africa: Standard Bank
With its combination of deep local knowledge and global technical skills, Standard Bank has scooped the award for the best trade finance bank in East Africa in the first year that GTR has recognised this category.
“In East Africa we’re able to match best-of-breed trade finance technicians with people on the ground who understand the clients, and work with them on a day-to-day basis,” explains Craig Polkinghorne, the bank’s global head and director of structured trade and commodity finance.
According to Polkinghorne, one of the biggest challenges for banks in Africa is to find experienced and skilled trade finance. “It’s important to create teams of people who are technically skilled and experienced and understand what they do in domestic markets,” he says.
As the bank has not made any staff changes to its trade teams in the past 12 months, Polkinghorne believes that it has stolen a march on its competitors on the continent by presenting its clients with stable teams that increasingly understand the client businesses better.
Standard Bank’s stand-out story in East Africa in 2012 was the progress it made in the energy sector.
“We have been particularly successful in our oil and gas franchise for both Kenya and Tanzania, which is very pleasing,” says Polkinghorne.
As a consequence, the bank has taken on a number of new clients in the region, and is providing services to them that include trade finance, as well as other banking products.
Polkinghorne explains: “In a world where capital is increasingly expensive and limited in its availability, loan products will be jealously guarded for targeted clients on the basis that banks achieve the appropriate return for the risk. Utilisation across a number of banking products enhances that return. Trade finance is living up to its reputation in that it acts as a catalyst for other banking activities.”
Standard Bank also played a key role in arranging Kenya’s debut syndicated term loan in mid 2012.
A total of 13 international and regional lenders joined the US$600mn facility, which will be used by the country to fund infrastructure projects as well as other costs.
The two-year facility is one of Africa’s largest syndicated loan transactions of 2012, and represents Kenya’s ability to access the global financial markets to support its continued growth.
Second place: Standard Chartered
Best trade finance bank in West Africa: FBN Bank (UK)
The award for best trade finance bank in West Africa has once again been secured by FBN Bank (UK), which celebrated its 10th anniversary in 2012.
According to managing director Peter Hinson, the bank’s most notable achievement over the past year has been the recognition by major competitors of the standing and significance of the bank’s position in the trade commodity finance market.
“What has been achieved over the last few years by the structured trade and commodity finance (STCF) team led by John Vowell has been truly remarkable,” says Hinson.
“To mention just two of the many deals completed during the year, Export Trading Group (ETG) and Leaf Tobacco A. Michailides SA (LTAM) were warmly received by our customers and participating banks. Working with and following the trade flows of a quality customer base has delivered that success,” he adds.
In mid-2012 the bank increased to US$200mn a US$140mn revolving multi-commodity, multi-jurisdictional facility for ETG that it arranged in March 2011. The facility finances 18 different commodity lines in 26 different countries. The facility covers many different African countries including Benin, Mozambique, Rwanda, Nigeria and Zimbabwe. It also finances an array of soft commodities such as cashew nuts, coffee, maize, rice, sesame seeds and sugar.
The success of this – and other transactions that the bank has arranged – reflects FBN UK’s growing commodity portfolio within Africa and its commitment to developing the African agricultural sector.
Going forward, even though the economic situation around the world has somewhat improved, Hinson explains that the bank will continue to focus its attention towards risk and managing that to ensure it delivers ideas to its customers that provide solutions for their businesses. “Working closely with them we will achieve our goal of continued growth and depth in the market,” he says.
Second place: Ecobank
Best trade finance bank in the Nordic region: SEB
For the fifth time in a row, SEB has been elected best trade finance bank in the Nordic region.
“I believe what has been appreciated by our clients is our efforts to not only focus on an agile transaction execution model, but also to work on understanding the broader context in which a trade finance need may exist. Understanding the bigger picture gives us the chance to contribute positively as we may see things from another perspective,” says Patrik Zekkar, head of trade and supply chain finance, GTS corporate Sweden at the bank.
He points out that SEB had to overcome numerous challenges in 2012, but managed to stay transparent in funding and liquidity, maintain its emerging market risk view and avoid the insertion of a sanction clause in letters of credit.
In 2013, the bank hopes to improve supply chain finance solutions for its clients. “We have now fully launched a transaction banking integrated business model and organisation. The goal with the integrated initiatives (trade, cash and receivables) is to become a partner throughout our corporate clients’ supply chain and liquidity management,” Zekkar says.
“Our near-term ambition is to expand our integrated knowledge of various corporates’ supply chains by using all competences within our transaction banking division in a structured way. Every corporate is unique but we work hard on identifying common critical transaction banking parameters among corporates in order to group these into new types of industry segments.”
He explains that grouping industries in segments is not relevant anymore, as corporates in the same industry, for example telecoms, have different business models, revenue mechanisms, supply chains, operation and governance models and legal structures, which all need to be taken into consideration.
“During the last 12 months we have been awarded several new large accounts in the Nordics,” Zekkar concludes.
Second place: Nordea
Best trade finance bank in North America: Bank of America Merrill Lynch
GTR’s annual readers’ poll has proven once again that Bank of America Merrill Lynch (BofAML) is a recognised leader in the North American trade market. The bank continues to have a substantial client base in the US large corporate and middle-market segments, and is ranked third, with an approximate 15% market share among US banks, in the US letter of credit business.
BofAML is one of the few banks to have “super delegated authority” from the Export-Import Bank of the US (US Exim) for working capital guarantee programme transactions of up to US$10mn, as well as “fast-track lender” status for transactions over US$10mn and up to US$25mn. “This allows us to approve credit under the programme for clients on an expedited basis,” says Bruce Proctor, BofAML’s managing director and head of global trade and supply chain finance.
Over the past year, BofAML has on-boarded 18 export credit agencies in Europe, Asia and North America, in order to expand its longer-term structured trade finance business globally.
What’s more, the bank’s supply chain finance programme, which started in 2006, recently reached a milestone of over US$2bn in outstandings. “We have nearly 40 buyers in our programme with the majority of them being US-based buyers with suppliers around the globe. The programme, which was started with US-based clients, has seen recent expansion in Asia and is beginning to see significant results in Emea and Latin America,” explains Proctor.
2012 also saw the bank roll out the latest in trade technology. “Trade Pro is our leading-edge trade management portal that allows buyers and suppliers to efficiently manage their global supply chains and optimise working capital,” says Proctor. In Q3 2012, the bank enhanced Trade Pro with the addition of a supply chain finance module, a tool to help clients manage risk while freeing up working capital, streamlining business processes and reducing the costs associated with supply chain management.
Second place: Wells Fargo
Best trade finance bank in Western Europe (excluding the Nordic region): Deutsche Bank
GTR readers have voted Deutsche Bank as the best trade finance bank in Western Europe. Over the past 12 months, the bank has dedicated itself to the development of supply chain finance (SCF) mandates, played a key role in the structuring of complex account receivables discounting deals and explored new markets. Furthermore, it has experienced success in times of adversity, as it continued to grow throughout the eurozone crisis.
Luca Corsini, Deutsche Bank’s head of trade finance for the Emea region, says: “This award is recognition of the great efforts the bank has taken to keep pace with sector trends and regulatory developments, and deliver innovative solutions globally in accordance with local market needs and norms. We couldn’t achieve this without the commitment and passion of our teams around the world who continually strive to gain a deep insight into client concerns, and design and implement solutions accordingly.”
Speaking of the challenges Deutsche had to overcome over the course of 2012, Corsini says: “The eurozone crisis – especially the economic turbulence in the southern European countries (Spain, Italy and Portugal) – has been both a challenge and an opportunity. We took the crisis as a chance to confirm our commitment to these markets, deepen existing client relationships, and increase market penetration. The results have been exceptional – and we will continue to grow our business in a healthy, sustainable way by balancing risk and returns and making trade finance a best-in-class product within the bank.”
The accolade fits nicely with Corsini’s stated goal for his area of Deutsche Bank: to be the preferred trade finance provider in Western Europe. His ambition for 2013, then, is to “achieve this by deepening our understanding of individual client and market needs, and act as a reliable partner to help them address them”.
Second place: RBS
Best forfaiting house: LFC
The London Forfaiting Company (LFC) has won the award for best forfaiting house in GTR’s annual Leaders in Trade poll.
Simon Lay, LFC’s managing director, explains that the company’s success is down to its corporate structure, which has allowed it to react quickly and develop capacity in new markets.
“Our product flexibility gives us the ability to produce innovative product solutions and deal structures, guided by the broad-based skill set of our management team. As a relatively small company size, we have organisational simplicity, which allows us to streamline our reaction and product delivery times. Therefore, it is much easier to deploy the whole of LFC’s global resources than can be achieved by most large banks.”
Lay tells GTR that 2012 has been a memorable year for the company, mainly because of its record results. As well as this, the company has developed funding lines outside of the group resources, and has structured a variety of new deals including football financing, pre-export financing and insurance-backed receivable financing programmes.
Lay says that despite the economic uncertainty and turbulence in Europe, LFC has managed to improve its financial performance with a low loan-to-loss ratio.
“In the last 12 months, many financial institutions reduced their activity in the market resulting in a lack of liquidity, but LFC was able to develop new funding strategies and increase its portfolio size during this period, providing our clients with greater risk capacity for their forfaiting businesses.”
Meanwhile, looking to the year ahead, Lay says that LFC aims to grow its global team to further invest in its network, attract third party investment and expand its global business into new markets.
Second place: UniCredit
Best factoring house: Fimbank
Fimbank has once again scooped the top spot as the best factoring house in GTR’s readers’ poll.
Fimbank secured the award because of its ability to offer factoring and open account products in countries which do not have access to these services, according to Fimbank’s president Margrith Lütschg-Emmenegger.
“We opened the door to finance to smaller and medium-sized companies, which are the drivers of all economies but are generally not well-served by the banking sector. We are proud that we are now fully operational in Brazil, a country with huge potential and challenges and many of the European factoring companies will benefit now that there is another reliable partner for the international business in this important emerging market.”
Lütschg-Emmenegger explains that this year’s slowdown in the Brazilian, Russian and Egyptian markets in particular, has created a nervy investor sentiment. However, she adds that Fimbank’s strong risk culture and selective approach to new business helped restore confidence for investors.
“Each entity experienced its own share of difficulties and challenges. To give an example, during 2012, BrasilFactors faced the challenge of structuring the new operation and setup; the difficulties associated with any start-up business. With the support of our partners BIC Banco and the IFC we closed 2012 with a team in place capable of offering a comprehensive package of factoring solutions specially adapted to the Brazilian market,” Lütschg-Emmenegger comments.
Looking ahead, Fimbank aims to grow its network and range of trade finance products. Additionally, the bank is planning on opening a new joint venture in Africa.
Second place: Bibby Financial Services
Best Islamic finance bank: ITFC
It’s the fourth year in a row that GTR readers have decided on the ITFC as the best Islamic trade finance bank, but the success certainly doesn’t mean the bank is getting complacent. 2012 has been a challenging year for Islamic finance, with the fallout from the Arab Spring continuing to spread instability and raise the risk profiles of the ITFC’s member countries. Despite this, the ITFC pursued and achieved its growth targets and managed to diversify its geographical coverage too.
Waleed Alwohaib, CEO of the ITFC, tells GTR: “In 2012, the ITFC pursued a growth target and trade finance approvals of US$4.4bn, a record number. It also attracted 14 new customers, along with opening operations in two new countries and three new sectors. In addition, ITFC focused on its Africa initiative, attracting four new clients from the Sub-Saharan region. It supported the Food Security Initiative of the Islamic Development Bank (IDB) in Africa through trade financing amounting to US$75mn.
Alwohaib attributes the ITFC’s success to its willingness to offer its services in challenging, less developed markets. He says: “The ITFC has contributed to developing markets and trading capacities of its member countries, to help them do business more effectively. Furthermore, we’ve helped to ensure successful trade in less developed member countries; reassuring markets, securing trade financing and carrying out trade development programmes.”
Looking to the future, the ITFC expects to focus more on structured trade finance, as it attempts to diversify its portfolio and reduce the average transaction risk. Alwohaib also hopes that the organisation can continue to penetrate new market segments and to support companies that can’t benefit from financing elsewhere.
Second place: HSBC
Best trade outsourcing bank: BNY Mellon
For the fourth consecutive year, BNY Mellon has been voted best trade outsourcing bank.
“This award proves that our collaborative approach continues to appeal to the market,” says David Cruikshank, CEO of BNY Mellon’s treasury services group. “Our ability to combine innovative, robust platforms with local market knowledge is our major strength as a global transaction banking partner, and will remain the focus of our activities throughout 2013.”
Although trade is fundamentally a relationship business, dependent on counterparty knowledge, trust and communication, technology has become the industry’s vital enabler. According to BNY Mellon, local-global bank collaboration can ensure the benefits of technological innovation are felt at all levels of commerce – thereby blurring the divide between local and global service standards.
“Modern cross-border trade demands electronic solutions,” says Susan Skerritt, executive vice-president and global head of business strategy and market solutions for BNY Mellon’s treasury services group. “Today’s platforms must be flexible enough to cater to both evolving trade patterns and varying levels of local market sophistication – particularly as the majority of local markets now seek to compete at a global level. In an increasingly fragmented world, strategic local-global bank partnerships can ensure the bilateral exchange of expertise, and plug local knowledge into ever-expanding cross-border trade networks. In this way, such partnerships can drive the industry forward.”
Findings from the GTR-BNY Mellon Attitudes to Transaction Banking survey – conducted in late 2012 – underscore the need for transparency, enhanced access to information, and greater counterparty communication. While these elements form part of banks’ broader client service offerings, the importance of technology is irrefutable.
“BNY Mellon has long recognised the value of partnership, particularly throughout turbulent times,” says Skerritt. “The past four years have been especially challenging for trade finance players, but partnership has proven the key to our continued success, as well as that of our client banks and financial institution partners. For this reason, we will continue to advocate local-global partnerships as a means to address present and future trade and supply chain concerns.”
Second place: Wells Fargo
Best trade credit and political risk insurance broker: BPL Global
BPL Global has been voted best trade credit and political risk insurance broker by GTR readers for the fourth consecutive year. According to Charles Berry, BPL Global chairman, policyholder clients benefit from the fact that BPL is a specialist whose sole focus is on “ensuring that the specialist trade credit and political risk insurance market (the PRI market) works for them”.
The company has been heavily involved in that market’s development and, in Berry’s words, has become “synonymous with the private market and its evolution over the past 30 years or so”. He says: “As such, this award is a great endorsement of the continuing success of the market.”
Over the past 12 months, BPL Global has made great efforts to expand its operations in Asia Pacific. After opening a Hong Kong office in 2011, 2012 was the year in which the company started operations in Singapore. Berry confirms that BPL Global’s ambitions for the future include “continuing to spread the word and grow our business around the world”.
For insurance brokers of all denominations, the past few years have presented a unique suite of challenges. Given that BPL’s primary focus is PRI, it has arguably stood to benefit from global instability more than most. “Undoubtedly,” says Berry, “the financial crisis in Europe and the political turmoil in the Mena region have put trade credit insurance under the spotlight. We’re therefore proud that the specialty PRI market has continued to perform strongly in the face of those pressures. Indeed, despite economic troubles, the capacity in our market has grown by roughly 50% over the last four years, which is an indication of the insurance industry’s underlying health.”
Second place: Aon
Best trade credit insurance underwriter: AIG
GTR readers have voted AIG as the best trade credit insurance underwriter for three years running.
Neil Ross trade credit regional manager tells GTR that the company’s success is determined by three key factors, its expertise, global presence and innovative technology.
“We are the largest excess of loss insurer with over 40 years’ experience. We underwrite the client, providing consistentcover which results in long-term, well-established relationships. Our policies are structured around the clients’ established credit management controls and procedures, giving them a higher level of autonomy to manage their own business.”
“Our global presence means we have multilingual, multinational underwriting teams across the world providing a partnership approach for our customers which results in consistent underwriting support throughout the economic cycle.”
AIG also prides itself on providing its customers with innovative technological solutions to manage and monitor their credit limits and ease policy administration, which is a fundamental part of the company’s overall proposition, Ross says.
AIG has spent the last year expanding into different countries and now offers trade credit solutions for customers around the world. AIG has also developed new solutions for lenders to support trade finance, and has created a new underwriting and processing hub to provide enhanced services for its customers.
The company has undergone some big changes over the last year. Formerly known as Chartis, AIG returned to private ownership in December 2012 after repaying the US taxpayer, and changed its brand name to that of its US-based parent company, AIG. Ross explains that the company has worked hard to expand its presence across Europe against the backdrop of the European crisis and double-dip recessionary pressures. In 2013, AIG aims to continue expanding globally, while giving its customers more choice and customised solutions.
Second place: Atradius
Best political risk insurance underwriter: ACE
Once again, GTR voters voted Ace Global Markets as the best political risk insurance underwriter. The firm’s head of product line, political risk and credit, Julian Edwards, believes that it is the experience and depth of knowledge of the underwriting and risk management team, along with the company’s consistent global approach to underwriting and global presence, which makes Ace the best in the industry.
“We also seek to provide positive leadership in the market place and a robust, secure balance sheet – thus giving our clients peace of mind in these difficult times. We always look to add value and are committed to support our clients’ activities. We are also fortunate that we work within a company that really understands country and credit risk,” he tells GTR.
Edwards explains that 2012 was challenging year but that Ace still managed to increase its presence, particularly in emerging markets. He says: “Growing our business in an extremely difficult market place and risk environment without compromising our underwriting strategy or results was a major achievement. The most pleasing aspect of this is how our business in Asia is developing and we are plugging into the south-to-south trade flows.
“Without doubt we have had to make some very hard underwriting decisions this year as the risk environment becomes more complicated and the outlook remains difficult. This has put our country and credit management team to the test as we have navigated our way through. This has been one of the most difficult years I have experienced.”
In the next few years, Ace is looking to increase its distribution platform and create a regional Latin American hub in Brazil, which will increase its ability to take advantage of the increasing south-to-south trade and investment opportunities.
Second place: Zurich
Best development bank in trade: EBRD
For its role in supporting trade flows in Central and Eastern Europe, GTR readers have voted for the EBRD as the best development bank in trade. The bank was the first to develop a trade facilitation programme in the region, acting as a harbinger for other banks to do the same. Since then, it has acted as the nucleus of a network of development banks, encouraging trade between growing European economies, creating strong links with the private and public sectors alike.
For Rudolf Putz, head of trade finance at the EBRD, the key to the bank’s continued success has been its targeted approach. He says: “Instead of disbursing funds only through a small number of large foreign banking groups, we offer our trade finance facilities directly to banks in EBRD countries of operation. This structure enables the EBRD’s partner banks in Eastern Europe and the CIS to deal not only with large international banking groups, but to execute international trade finance transactions also with smaller and medium-sized foreign correspondent banks worldwide.”
2012 saw the EBRD widen the scope of its trade finance activities to include a supply chain finance (SCF) programme and international factoring and forfaiting transactions. It also launched its innovative e-learning trade finance facility, which has been taken up by more than 500 trade finance bankers in 140 of its partner banks.
And with various regulatory and macroeconomic issues persisting around Europe, the role of the EBRD took on even more importance in 2012. Putz explains: “Due to economic uncertainties in their home markets and capital constraints, many foreign commercial banks have been unable to cover the trade finance demand of banks, importers and exporters in EBRD countries of operation. Our trade facilitation programme has helped banks in Eastern Europe and the CIS continue their trade finance transactions with foreign commercial banks under an EBRD guarantee.”
Second place: Asian Development Bank
Best trade finance boutique institution: Falcon Group
Pipping last year’s winners to the post, Falcon Group has reclaimed its title as the best boutique trade finance institution.
The global financial crisis has indeed taken its toll on bank appetite for corporate funding. Liquidity constraints and more stringent regulatory proposals, such as Basel III, are forcing banks to slim their balance sheets and cut back on lending – opening the door for alternative financiers. And this is particularly true within the trade finance space, where corporates have observed a sharp decline in funding opportunities.
Given this, alternative financiers are observing increased demand in general, and Falcon Group in particular has provided in excess of US$7bn in funding to corporates over the last four years.
Recent years have seen Falcon Group penetrate and develop new opportunities throughout the Middle East, Asia Pacific, North and Latin America regions. Additionally, appetite for alternative financing is growing in southern Europe, and Falcon Group is responding to demand in the US with plans to open an office in New York – its second in the country.
“Our recent growth is indicative of the opportunities we see arising for alternative financiers, and of the recognition of our innovative approach,” says Will Nagle, CEO of Falcon Group. “Many corporates are looking for a more nimble, innovative and flexible approach. As a result, we are seeing more and more opportunities. No two companies are exactly the same, so we take great care to ensure that the solutions we provide are perfectly suited to the precise requirements of our client.”
Second place: LFC
Best export credit agency: K-sure
K-sure has been voted the best export credit agency in GTR’s annual poll.
K-sure has prided itself on serving South Korea’s exporters and on its resistance to the financial turmoil stemming from Europe and the Mena region over the past year.
“Korea overcame the odds by becoming the ninth country in the world to attain the US$1tn trade mark. Amid these difficult times, K-sure has strived to serve its exporters behind the scenes,” a spokesperson at K-sure says.
“For 2012, we at K-sure detected early on that the major markets of Korean exports would be hit by the global economic downturn, so we raised our total business volume to W200tn (US$9.3bn), injecting an additional contingency fund of K10tn to the initial volume of K190bn.”
Additionally, K-sure created a trade insurance support programme in August to further help its small and medium enterprises (SME) customers with understanding export guidelines.
K-sure hopes to roll over its success into 2013, by expanding into new regions and supporting its SME customers by helping them grow and expand into the global market. The ECA also hopes to boost its support for medium and long-term project finance, particularly in the engineering, procurement and construction and resource development sectors.
“The year 2012 is more meaningful to K-sure than any other year. It is the first year for Korea to take a giant step toward achieving the US$2tn mark in trade and it is also the 20th anniversary of K-sure’s establishment,” the spokesperson adds.
Second place: US Exim
Best trade finance software provider: China Systems
China Systems capitalised on its second place success in GTR’s 2011 Leaders in Trade Awards by being voted the best trade finance software provider for 2012, and attributed this achievement to both its people and its products.
“At China Systems, we place a strong focus on our people and they are well-known for their commitment,” says Joel Schrevens, solutions director. “We also have a fantastic product, and are dedicated to trade, which is very important because this means we can always offer a consistent service,” he adds.
Today, China Systems is one of few trade finance software providers to be fully-certified by Swift, and possess SwiftReady labels for trade finance, supply chain finance and trade and supply chain finance for corporates.
During the last year, the company has placed an increased focus on meeting the needs of banks and their corporate clients with solutions that offer end-to-end functionality from trade processing to reconciliation and settlement.
These solutions offer ease of integration with banks’ existing infrastructure for lending, risk management and payments. “Our service-oriented architecture ensures that banks do not have to take every component on the shelf. Where they already have the required components in place, China Systems’ solutions will integrate with them efficiently,” says Schrevens.
Moving forward, as corporates themselves become more demanding and press for multi-bank trade finance solutions, China Systems is eager to fulfil these expectations – and position itself in the corporate market too.
“Although corporates are not traditionally our market segment, there is definitely a lot of drive in this market. Many corporates trade on a global basis, and have huge volumes of trade processing to handle, and they want a consolidated view of their positions,” says Schrevens.
To help develop its presence in the corporate market, China Systems is looking to build partnerships with large Swift service bureaux, through which its trade finance solution, provided as a Software as a Service (SaaS), can be offered to companies alongside Swift’s multi-bank connectivity.
It is also looking to build strategic partnerships with a wide range of other third party providers to offer its clients even broader solutions, which encompass e-invoicing, factoring and additional trade finance capabilities.
Second place: Misys
Best supply chain finance bank: JP Morgan
JP Morgan has been voted best supply chain bank for the third year running in 2012, a reflection of its ongoing supply chain finance investment.
Andrew Betts, global head of supply chain, JP Morgan Treasury Services, attributes the bank’s success to its commitment to helping companies enhance working capital, facilitating the flow of goods, mitigating supply chain risk and connecting counterparties.
“We have invested in a comprehensive solution, expanded our geographical footprint, and linked it all together with a truly global technology platform,” he says.
During 2012, JP Morgan facilitated the supply chain programme expansion of multi-national and locally-based clients into key markets such as Latin America, and across Asia in countries such as Japan, Taiwan and China. It now offers supply chain financing in 45 countries; almost double the number of countries it covered just two and a half years ago.
“In China, we navigated the complexity of a changing regulatory environment as well as challenges such as free trade zone requirements to deliver solutions using the renminbi (Rmb) as a currency for both local and cross-border trade,” explains Betts.
“One key to our success has also been our world-class risk distribution programme, which adds depth and flexibility to the entire supply chain solution.”
During 2013, JP Morgan anticipates that one of its main challenges will be ensuring the ongoing success of its clients’ programmes.
“Winning a new mandate is exciting, but the true challenge is what happens next: we need to deliver on our commitments, and be there as these programmes grow,” says Betts.
“Demand is also increasing for ever-larger global supply chain programmes, and as it does banks must continue to expand risk distribution capabilities by both tapping other banks and attracting alternative investors. We are seeing a growing interest from non-bank FIs who are looking to invest in trade finance assets.”
He adds that clients are also increasingly asking banks to combine pre-export finance, post-import finance, receivables purchase and supplier financing into multi-currency, multi-regional solutions.
Second place: Standard Chartered
Best bank for documentary processing: RBS
RBS’s strong focus on documentary processing saw it voted best bank again in this category for 2012 – making it the third time the bank has proved itself a leader in documentary processing with GTR readers.
“We are extremely focused in the delivery of international solutions linking risk management services to appropriate trade and supply chain financing. Furthermore, documentary processing of letters of credit – on both the import and export side – is a core business for us,” says Manoj Menon, global head of trade service, innovation and customer proposition at RBS. “These services are available to our client franchise – both corporates and financial institutions – and supported by on-the-ground service through our broad geographical network.”
He adds: “As a bank, we have vast experience in handling documentary credits. We have a unique value proposition for handling import and export letters of credit and are continuously introducing new value-added services so as to be proactive in this marketplace.”
It now plans to expand its activities in the area of ePresentation. “We were involved in the first ever electronic transmission of the documents required for a documentary credit, using eUCP, with Bolero and now plan to extend this offering to other clients too,” says Menon. “RBS recognises this as a step towards broadening the use of technology in cross-border electronic commerce for our clients and in the industry.”
Moving forward, Menon believes that regulatory changes represent the most prominent challenge for trade banks.
“Basel III will affect trade finance, and we need to examine three separate measures: the introduction of the asset value correlation (AVC) multiplier for large financial institutions, and the new liquidity and leverage ratios,” he says. “The FI AVC is one of the Basel III measures intended to address the risks stemming from the interconnectedness of the global financial system. It affects the pricing of our exposure to the world’s largest regulated banks (with over €70bn of assets), as well as all unregulated banks.”
Second place: Wells Fargo
Best trade and supply chain platform provider: Bolero
Bolero International was voted best trade and supply chain platform provider by GTR readers for 2012, following a year which saw increased market adoption of its collaborative solutions for paperless trading between corporates, banks and other supply chain members.
“Across the market, we are associated with the provision of ‘real’ solutions which solve business problems. Lots of companies in this space talk theory but do not deliver actual solutions,” says Arthur Vonchek, CEO of Bolero, pointing out that his company’s provision of Software as a Service-delivered trade finance solutions also enables clients to realise benefits quickly.
During 2012, Bolero grew geographically, opening its first direct office in the United States, where it anticipates significant new business opportunities.
It saw rapid market adoption of its ePresentation services, which allow all the documents required under a documentary credit, such as commercial invoices, packing lists and insurance certificates, to be sent electronically over its platform, and completed its first ePresentation into mainland China.
The company also witnessed significant “real use” of its end-to-end electronic bill of lading solution, with take-up particularly strong in Asian markets. The solution benefits all supply chain members by speeding up administrative processes and eliminating the risk of physical bills of lading being delayed or lost.
Moving forward, Bolero now plans to spearhead market adoption of its ePresentation services, and offer banks paperless direct presentation services.
It is also looking to develop a partner ecosystem. “The whole ePresentation space is maturing now, and we are looking to introduce additional technologies and link up with new partners,” explains Vonchek. “We also want to make our platform available to other communities. For example, we want to extend our trade finance value proposition to shippers and carriers.”
The company also plans to further enhance the end-user experience for users of its ePresentation services, as well as expanding the Bolero Apps Store.
“We are now working in an environment where there is a huge emphasis on compliance, regulation and risk, and this all plays to the benefits of what we offer,” concludes Vonchek.
Second place PrimeRevenue
Corporate that operates the best in-house trade finance business: Siemens Financial Services
Readers have voted for Siemens Financial Services to receive GTR’s first-ever award for corporates’ best in-house trade finance business.
Siemens Financial Services Trade Finance Advisory (SFS TFA) is the competence centre for all guarantee and letter of credit (LC)-related business transactions within the company. It is managed centrally from headquarters in Germany, and covers regional needs from 80 local guarantee departments across the globe.
Gerhard Heubeck, head of trade finance advisory at Siemens Financial Services, explains: “Our teams consist of 60 experienced employees on headquarter level in Germany and approximately 190 trade finance people in the worldwide guarantee departments. Most team members have previous experience in the banking sector and banks’ trade finance business, therefore SFS TFA not only has a clear view of the needs of the Siemens Financial Services sectors, but also of the regulations and processes within the banking sector.
“This advisory is supported by a state-of-the-art IT environment that is used worldwide in the Siemens Financial Services trade finance business. It enables SFS TFA to ensure detailed documentation and straight through processing of the LC and guarantee transactions.”
He adds that Siemens Financial Services has restructured its financing activities within the last 12 months, clustering them in 13 regions in order to optimise processes. Consequently, SFS TFA also restructured its worldwide advisory services and implemented a “functional leadership” concept for the guarantee departments worldwide.
“Implementing the functional leadership concept for trade finance business in the Siemens Financial Services group’s international organisation and all affiliated companies worldwide was definitely a major organisational challenge. Managing financial partners’ counterparty risk in uncertain times and a potential second financial crisis in order to choose the right partner for the right business are further challenges,” Heubeck says.
Commenting on the ambitions and goals for the future of Siemens Siemens Financial Services’s trade finance business, he adds: “We regularly challenge ourselves by benchmarking our processes and strategies to protect the Siemens balance sheet, also in times of upcoming new regulations like Basel III. We strive to be best in class in trade finance business.”
Second place: UPS Capital