Towards the end of last year, GTR called everyone involved in the trade finance market to vote in our annual Leaders in Trade awards.
These are the results:
Best global trade finance bank:
Best global export finance bank:
Winner: Standard Chartered
Best global commodity finance bank:
Winner: ABN Amro
Runner-up: BNP Paribas
Best global structured commodity finance bank:
Runner-up: Deutsche Bank
Best trade finance bank in Latin America:
Best trade finance bank in Asia:
Winner: Standard Chartered
Best trade finance bank in CEE:
Runner-up: Raiffeisen Bank
Best trade finance bank in CIS:
Winner: VTB Bank
Best trade finance bank in South Asia (including India, Pakistan, Bangladesh, Sri Lanka only):
Best trade finance bank in Australia and the Pacific:
Best trade finance bank in the Middle East & North Africa:
Winner: Abu Dhabi Commercial Bank
Best trade finance bank in Sub-Saharan Africa:
Winner: Standard Bank
Best trade finance bank in the Nordic region:
Winner: Nordea Bank
Runner-up: Danske Bank
Best trade finance bank in North America:
Runner-up: Bank of America Merrill Lynch
Best trade finance bank in Western Europe (excluding the Nordic region):
Winner: Crédit Agricole
Best trade finance bank in the UK:
Best forfaiting house:
Winner: London Forfaiting Company
Best factoring house:
Winner: Bibby Financial Services
Runner-up: Mena Factors
Best Islamic trade finance bank:
Winner: Abu Dhabi Commercial Bank
Best outsourcing bank:
Winner: BNY Mellon
Runner-up: Wells Fargo
Best trade credit and political risk insurance broker:
Winner: BPL Global
Best trade credit insurance underwriter:
Runner-up: Euler Hermes
Best political risk insurance underwriter:
Runner-up: ACE Group
Best development bank in trade:
Runner-up: Asian Development Bank
Best alternative trade finance provider:
Winner: Falcon Group
Runner-up: Trade Finance Partners
Best export credit agency:
Winner: Euler Hermes
Best trade finance software provider:
Best supply chain finance bank:
Best bank for documentary processing:
Runner-up: Crédit Agricole
Company with best supply chain finance platform:
Best trade finance law firm:
Winner: Sullivan & Worcester
Runner-up: Allen & Overy
GTR speaks to some of the global winners.
Best global trade finance bank: Citi
Having been voted the second-best global trade finance bank by GTR readers in 2014, Citi has wrestled the crown back in 2015 – a year which has been eventful but ultimately successful for the bank. In one of the most notable events of the year in trade, Citi engaged in a High Court battle with the trading house Mercuria pertaining to a repos transaction which was involved in the Qingdao scandal.
As well as that, 2015 was a year in which Citi “continued to do the basics well”, extending its practice in China and working closely with development financial institutions in what continues to be a troubling time for trade finance, particularly in less developed parts of the world.
“While the past few years have presented financial institutions with great challenges, Citi has maintained a deep commitment to its trade franchise, with trade finance and services capabilities in 86 countries and the ability to facilitate transactions in 110 countries. We operate worldwide because our clients are worldwide.
“Our scale enables us to have one of the largest investment budgets in the business, so clients gain access to market-leading solutions and cutting-edge technology. We continue to extend our offerings to new geographies and have increased tech investment to support trade innovation and advancement of our capabilities,” says John Ahearn, the bank’s global head of trade.
He adds: “We are committed to supporting our clients though the ongoing changes in market practices, shifting business priorities, technology and banking infrastructure changes,
and regulatory requirements that may impact business operations and development. We are pleased to have our team’s efforts acknowledged by GTR and the industry, and we look forward to continuing our strong legacy as a leader in trade.”
Best global export finance bank: Standard Chartered
In what has been a relatively tough year for export finance, GTR readers have recognised the efforts of Standard Chartered in keeping its customers financed. The ICC’s Trade Survey for 2015 found that pricing was slow, with only 12% of those quizzed reporting an increase over the past year. Legal and regulatory matters are proving challenging but 79% of bankers quizzed said that export finance remains a profitable area.
Standard Chartered’s involvement in the recent Oyu Tolgoi financing along with a host of export credit agencies shows that even in challenging times for commodities markets, the bank has kept its skin in the game. The transaction had been on the backburner for a number of years as the government and the sponsor – Turquoise Hill – ironed out some disagreements around the project’s structure and ownership.
And as China looks to leverage its spending power along the New Silk Road route, as part of its pan-continental One Belt One Road (OBOR) strategy, few western banks will be in a better position to capitalise on the financing opportunities than Standard Chartered, given its long history of working in Asia, Africa and the Middle East. Indeed, in October the bank was a signatory to the London Metals Exchange memorandum of understanding on the OBOR, which aims to support funding for OBOR infrastructure projects as well as the internationalisation of the renminbi.
Ravi Suri, the bank’s global head of project and export finance, regional head of commodity finance for the Middle East and Pakistan expressed his delight at winning the award, telling GTR: “We are extremely proud to have won this prestigious award. It’s a testament to our strategy of leveraging our cross-border footprint while working collaboratively with exporters and export credit agencies to bank the people and companies driving investment, trade and the creation of wealth across Asia, Africa and the Middle East.”
Best global commodity finance bank: ABN Amro
It has been a challenging year for commodity finance, with banks in this space navigating through plunging prices, scandals, and regulatory hurdles. ABN Amro is braving this area, continuing to support its clients in various jurisdictions. “It is an interesting time for commodity markets, with declining prices in many markets and economic slowdown in several major commodity countries,” reflects Jan-Maarten Mulder, ABN Amro’s global head of commodities clients. “The regulatory impact on both commodity banks and commodity companies adds to these challenging times. Therefore we are very proud to have been able to continue to support our clients and continue to grow our market position last year,” he adds.
According to Mulder, 2016 is expected to be another challenging year. The bank’s core strategy, in fact, remains unchanged. ABN Amro specialises in three commodity sectors: agricultural, energy and metals and steel. “The outlook for emerging markets and prices is moderate. We endeavour to have a continuous strategic dialogue with our clients. We work closely together with our clients to provide relevant market knowledge and a comprehensive range of products and services for the moments that matter,” says Mulder.
ABN Amro’s client basis includes companies active in the sourcing, production, processing, trading and distribution of commodities. The bank offers them standard and structured banking and financial advisory services, including asset-backed and working capital facilities, structured commodity and pre-export finance, letters of credit, collections, guarantees and counterparty risk financing, cash management and electronic banking.
ABN Amro’s commodity teams operate around the world with offices in the Netherlands, Russia, the UAE, Singapore, Hong Kong, China, the US and Brazil. “The relations with our clients continue to be the basis for this success,” says Mulder. “Thank you to our clients and the GTR readers for this great recognition and award.”
Best global structured commodity trade finance bank: ING
2015 saw ING win the best structured commodity trade finance bank award once again, consolidating its position as a globally recognised market player. In one of the most turbulent years ever to hit the commodities sector, ING was involved in some of the largest transactions signed, most frequently at arranger or co-ordinator level: from Russia’s Uralkali and Metalloinvest’s pre-export finance (PXF) deals – both over US$500mn – to Vitol, Mercuria and Gunvor’s mega-syndicated revolving credit facilities (RCF).
Bernard Zonneveld, ING’s global head of structured metals and energy finance, says: “This year was characterised by reduced business volumes caused by a combination of the Russian sanctions, depressed commodity prices, significant capex reductions on part of producers, and, last but not least, continued pressure on risk premiums. Despite all these challenges, ING managed to close a number of high-profile transactions for, among others, NLMK, AMK and Eurochem. It is however becoming increasingly clear that commodity bankers need to further accelerate the pace of innovation when dealing with the ever-changing market circumstances and customer needs.”
A good testament of ING’s faith in the commodities sector is the bank’s recent involvement in the US$4.4bn financing of Mongolia’s Oyu Tolgoi copper mine, despite record-low prices in the industry and four years of back and forth between the mine’s developer, Rio Tinto, and the Mongolian government. As the largest untapped copper deposit in the world, Oyu Tolgoi’s output, which should begin four years from now, is bound to shift the balance of global copper production, and those investing in it are showing strong belief in the recovery of the industry.
“For those commodity bankers that at times find it hard to see a silver lining and even question whether the light at the end of the tunnel will ever get closer, let me remind you that the inherent cyclicality of the commodities market also means that things will get better,” Zonneveld tells GTR.
Best trade finance law firm: Sullivan & Worcester
Though always present in the list of top firms, this is the first time that Sullivan & Worcester has scooped the top prize – and it reflects a year of strong achievements. In particular, the firm advised Deutsche Bank as arranger and documentation agent on the annual Cocobod pre-export finance, which this year faced challenges related to weather conditions and alleged bad governance on the part of the Ghana Cocoa Board. Still, the facility ended up oversubscribed at US$1.8bn.
Geoffrey Wynne, partner at Sullivan & Worcester UK, head of the London office and of the trade and export finance practice, tells GTR: “Sullivan & Worcester is thrilled to win this prestigious trade finance award. The success of the firm’s global trade and export finance team can be put down to the fact that as trade finance has changed so rapidly in recent years, owing to diverse factors including regulation, geopolitical issues and issues of risk, etc, we have been able to adapt with it.”
In 2015 the firm’s London office celebrated its two-year anniversary, and its Washington office made a project finance hire in the person of Merrill Kramer, of counsel.
“In London alone, the team is working with over 35 banks and financial institutions, offering the full range of trade, commodity and export finance services, with a heavy emphasis on developing markets – including Africa, Asia, the CIS and Latin America. The fact that Sullivan & Worcester is also able to cover New York law with partners who understand trade finance makes the offering even stronger. We can work in markets across the globe as we have good contacts with law firms in most jurisdictions and we can explain what we need from them,” explains Wynne.
He adds that Sullivan & Worcester’s approach is constantly changing in terms of advice given to clients and structures recommended to adapt to an evolving commodity landscape and ever-changing trade flows. “Our model is proving to be successful and we will continue to build on these foundations,” Wynne concludes.
Best export credit agency: Euler Hermes
Proving itself a reliable partner to German exporters as well as to domestic and international banks engaged in export finance, Euler Hermes earned top place among the world’s export credit agencies in 2015.
“We have set ourselves the objective to offer best service and advice, and strive to constantly develop the export credit guarantee scheme in light of a changing regulatory and economic environment. In order to continue this success story, we need to adapt to a changing trade environment,” says Edna Schöne, board member of Euler Hermes Aktiengesellschaft.
The increasing globalisation of value chains is leading to constant pressure on foreign content rules and triggering enhanced risk-sharing models. “To offer a competitive contract price, it is often mandatory for an exporter to include deliveries from third countries into a project,” explains Schöne.
In 2015, Euler Hermes introduced a free initial inquiry for cases in which the proportion of foreign deliveries exceeds 49%.
“This allows exporters to determine at an early stage whether the federal government is fundamentally willing to provide cover for the transaction despite the fact that the bulk of the manufacturing content is likely to be of non-German provenance. This is just one example of the innovative power of Euler Hermes. Others will follow,” she says.
Additionally, Euler Hermes continues to prove the economic benefit of export credit agencies. In 2015 the renowned German-based Ifo Institute once again documented the export-creating effect of Euler Hermes and underscored the importance of its services in keeping existing jobs and creating new jobs in Germany and abroad.
Best development bank in trade: European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development (EBRD) has reconquered its position as best development bank in trade.
In 2015, the majority of TFP transactions facilitated imports of food and food commodities, metals and smaller machinery and equipment into EBRD countries of operation. The list of operations facilitated includes the sale and delivery of juices and canned food from Armenia to Russia, optical cables from Belarus to Armenia, tram cars from Ukraine to Egypt, and corn from Croatia to Slovenia.
“The slowdown of economic growth resulted in lower demand for larger machinery and production equipment. TFP support was particularly needed by smaller and medium-sized banks and banks in countries with lower country risk ratings which, as yet, do not have sufficient trade finance facilities from foreign commercial banks,” Rudolf Putz, head of the TFP, tells GTR. “Larger partner banks in the more advanced countries and the southern and eastern Mediterranean region predominately used the TFP for large-volume trade finance transactions which foreign commercial banks were not ready to finance.”
Letters of credit were the most used means of financing imports of machinery and equipment, while recurring imports of foodstuff, clothing, fast-moving consumer goods and vehicles were mostly financed through counter guarantees and short-term cash advances with tenors of six to 12 months.
Looking ahead, Putz sees the availability of trade finance limits from foreign commercial banks remaining a significant impediment to financing deals in the EBRD’s coverage area. “On the one hand, these market conditions continue to support the fundamental demand for TFP in EBRD countries of operation. On the other hand, the market environment and market sentiment in most EBRD countries of operation have not improved, dampening trade generally and reducing the demand for trade finance,” he says.
Best trade credit and political risk insurance broker: BPL Global
“We are delighted to be recognised as the industry’s leading specialist insurance broker for the sixth year in a row,” says BPL Global chairman Charles Berry, on learning of the firm’s win.
“While the global political and economic environment continues in a state of flux, and our insurance market evolves almost daily, our goal remains the same – to provide market-leading service to our clients. Our strategy for delivering this makes us a bit different: specialisation, operating globally in our niche, unambiguously acting for policyholders, and being employee-owned. This works, and we see no reason to change strategy.”
With this in mind, the company recently appointed James Esdaile and Sian Aspinall as joint managing directors.
Esdaile talks to GTR about BPL Global’s success in 2015: “It has been another successful year, with growth into new markets, with our Dubai office opening, and further inroads into the medium to long-term (MLT) export credit business where we have the appetite and capacity to offer an alternative to traditional ECA cover.”
Indeed, over three quarters of BPL Global’s portfolio consists of comprehensive non-payment cover, with the balance being “pure” political risk exposure to expropriation, political violence and similar risks. Of the comprehensive non-payment policies, over 60% of the exposure is for MLT business with policy periods exceeding two years.
Aspinall, adds: “Without doubt, the credit and political risk insurance market is still at an early stage in its development. Many of the large banks already use comprehensive non-payment insurance, making up over 50% of our business, yet there are significant opportunities to provide the product to regional banks in Asia Pacific and the Middle East, as well as those in Western Europe and the US that are yet to make full use of the offering.”