Nominees for best trade finance bank in Southern and Eastern Africa:
Crown Agents Bank, Standard Bank, Rand Merchant Bank, SMBC
Winner: Standard Bank
Nominees for best trade finance bank in West Africa:
Crown Agents Bank, Access Bank UK/Nigeria, Ecobank, SMBC
Nominees for best trade finance bank in North America:
HSBC, Bank of America Merrill Lynch, BNY Mellon
Winner: Bank of America Merrill Lynch
Nominees for best trade finance bank in South America:
Nominees for best trade finance bank in East Asia and the Pacific:
Mizuho Bank, ANZ, Deutsche Bank, ING
Nominees for best trade finance bank in South Asia:
Yes Bank, HSBC, State Bank of India, ICICI Bank
Winner: State Bank of India
Nominees for best trade finance bank in Central Europe and Eastern Europe:
Commerzbank, VTB, mBank
Nominees for best trade finance bank in Western Europe:
HSBC, Commerzbank, ING, Crédit Agricole, BNP Paribas
Winner: Crédit Agricole
Best trade finance bank in the UK:
Nominees for best trade finance bank in the Middle East and North Africa:
ADCB, Mashreq, First Abu Dhabi Bank, Emirates NBD
Winner: First Abu Dhabi Bank
Nominees for best trade credit and political risk insurance broker:
Texel, BPL Global
Winner: BPL Global
Nominees for best trade credit and political risk insurance underwriter:
XL Catlin, Chaucer, The Channel Syndicate
Best development bank in trade:
Nominees for best alternative trade finance provider:
TradeRiver, London Forfaiting Company (LFC), Greensill Capital, Barak Fund Management
Winner: Greensill Capital
Nominees for best trade finance software provider:
Trade Technologies, Misys, Bolero
Nominees for best fintech disrupter:
Best export credit agency:
Winner: Euler Hermes
Nominees for best trade finance law firm:
Simmons & Simmons, Sullivan & Worcester, Hogan Lovells, Holman Fenwick Willan (HFW)
Winner: Sullivan & Worcester
Best correspondent bank:
Winner: BNY Mellon
Nominees for most innovative bank:
Lloyds Bank, Ecobank, HSBC, Barclays
Nominees for bank that has made a significant contribution to sustainability:
Commerzbank, EBRD, KfW, IFC
Nominees for best supply chain finance bank:
Santander, BNP Paribas, Greensill Capital, Nedbank, Standard Chartered
Winner: BNP Paribas
Nominees for best export finance bank:
Barclays, BNP Paribas, Citi, SMBC
Nominees for best commodity finance bank:
Citi, Deutsche Bank, ING, Société Générale
Winner: Deutsche Bank
Nominees for best trade finance bank:
Crédit Agricole, BNP Paribas, HSBC, Standard Chartered
Best trade finance bank in Southern and Eastern Africa: Standard Bank
Standard Bank is one of the largest banks in Africa and had R184bn – about US$11.8bn – market capitalisation as of the end of 2015. As such it is well placed to provide its clients with access to trade finance solutions within the 20 countries that it is present in across the continent.
But it was not size alone that led GTR to award the bank as the best across Southern and Eastern Africa. The bank submitted deals to substantiate its nomination that spanned the length and breadth of these regions.
One such deal saw the bank enabling the sale of FMCG goods into Angola amidst US dollar liquidity shortages. This was a transaction indicative of Standard Bank’s ability to structure bespoke solutions and facilitate trade into challenging markets, while mitigating payment risk, providing off-balance sheet financing and overcoming foreign currency liquidity constraints.
Another transaction saw the bank support and participate in South Africa’s largest locomotive deal to date – through the issuance of an advance payment guarantee on behalf of a rail transportation equipment manufacturer.
Other standout deals included – but were not limited to – an import letter of credit financing denominated in Chinese renminbi for a leading South African retailer; a structured import finance facility to assist with the importation of refined fuel products into Kenya for a pan-African downstream oil marketing company; and funded risk participation on working capital facilities for a portfolio of clients in the telecoms and oil and gas sectors.
Best trade finance bank in West Africa: Ecobank
It is the way in which Ecobank continues to seek out innovative ways to support its customers in trade that drove GTR to award it as the best trade finance bank in West Africa.
Nigeria provides a good example of the application of this innovation: in the wake of plummeting international crude prices and major security concerns in the Niger Delta region, crude oil production and the associated foreign exchange flows suffered a great setback in 2016. Production volumes reduced to less than 1 million barrels from over 2 million barrels per day and the foreign exchange market became completely illiquid. The lingering paucity of foreign exchange liquidity made it increasingly difficult for Nigerian banks to settle their trade obligations, leading correspondent banks to reduce, and eventually suspend, most of their credit lines.
In spite of these challenges, Ecobank continued to innovate by creatively developing products and structures to support its customers’ trade business.
For one, it developed an export finance product programme targeted at growing non-oil exports and soft agricultural products, which until then had received little attention. It also partnered with the Nigerian Export-Import Bank to shore up export stimulation facilities to suitable customers to help them build capacity. The flows from regional and international non-oil exports were employed to settle the accumulated trade obligations in order to restore confidence on the part of its correspondent banks.
Moreover, Ecobank developed diverse transaction structures on a case-by-case basis depending on the type of deal and the needs of the parties. It also began to focus on growing domestic trade by targeting trade-related loans and advances, as well as supply chain initiatives, such as its e-Financial Supply Chain application.
Best trade finance bank in North America: Bank of America Merrill Lynch
It is Bank of America Merrill Lynch’s (BofAML) focus on the North American midsized market that made it stand out from its competitors in this category. While many global banks operating in North America are targeting large corporates for trade and supply chain financing, BofAML has decided to expand its strategy, adding midsize companies to its portfolio both domestically and, as they grow beyond the American borders, globally.
The bank’s strategy comes from the fact that the midsize market continues to grow, experiencing 7.2% growth in 2016. These companies often need and want to expand overseas, but don’t have the resources to support these efforts. BofAML came to the conclusion that there is a greater need for better financing alternatives for midsize companies further down the supply chain than large corporates.
To support its strategy, the bank made a number of investments, including simplifying documentation, increasing the number of advisors on the ground to streamline supplier onboarding, enhancing its online portal, CashPro Trade, to allow companies of all sizes to join the supply chain finance (SCF) programme more quickly, and expanding its receivables finance programme.
“What we liked most about the BofAML team is their hands-on approach with our vendors in the onboarding process,” says James Myers, CFO at Falls of Neuse Management (FNM). “They implemented our SCF programme effectively and kept us fully informed along the way.”
Best trade finance bank in South America: Santander
Santander has a long history in trade finance in South America, with a strong basis in the main economic hubs of Brazil, Argentina, Chile, Colombia, Peru and Uruguay and over 50,000 employees in the region.
The bank’s deep knowledge of the local regulatory and business environment – combined with access to international markets through the global Santander network – allows it to provide outstanding trade finance service to its clients. This local presence/global reach combination is unique in South America, where most of the banking landscape consists of local banks that do not have a similar global network, or global financial institutions that don’t have a strong local presence or knowledge. In fact, stringent banking regulations and economic turmoil in the region have driven a lot of large international banks away from the market – making Santander’s resilience and expertise all the more laudable.
Some of Santander’s highlights in 2016 included the mandate for a US$1.2bn trade import facility for Petrobras – the largest trade finance transaction in South America in 2016 – as well as participation in a long-term loan of US$378mn to Argentina’s Axion Energy. The latter was used for the expansion of its oil refining capacities in Campana and to help its adoption of higher environmental standards, and marked Argentina’s return to long-term syndicated loans.
The bank was also an active bookrunner on Glencore’s US$7.7bn revolving credit facility signed in February 2016.
Best trade finance bank in East Asia and the Pacific: Mizuho Bank
As the deal flow in Asian trade finance dried up over the past year, the Japanese banks remained highly liquid and willing to do business. Mizuho was a constant presence on some of the biggest deals in the Asia Pacific region, particularly in the commodities space.
Supply chain finance has been one of the more active areas in East Asian trade over the past couple of years. Mizuho has been successfully embracing this trend, rolling out a supply chain finance platform to Hong Kong, Bangkok, Singapore, India and Malaysia. Next on the agenda are China, Australia and Indonesia, as Mizuho looks to rubberstamp its status as a dominant bank in East Asian supply chain finance.
It makes sense: Japanese companies have been introducing Asia Pacific nodes to their supply chains and production lines for years. Capitalising on this trend, Mizuho has introduced supply chain finance transactions for major Japanese companies in the automotive, telecoms and retail spaces in Thailand.
As ever, Mizuho was a regular presence on the big ticket export credit agency-backed deals throughout East Asia over the past year. Perhaps most notably, the bank closed an ECA-backed loan for Lotte Chemical Corporation, marking the first time a Korean chemical company had an untied loan in the US market. The transaction was awarded a GTR Best Deal of 2016. Further activity was logged in Indonesia and Vietnam. Mizuho continues to be one of the biggest names in the market.
Best trade finance bank in South Asia: SBI
Indian banks are known to compete fiercely on their home turf, but perhaps the most eye-catching element of State Bank of India’s (SBI) submission has been its global outlook. Over the past 12 months, SBI has been at the forefront of the country’s banks operating in the international trade space. In the last nine months of 2016, the bank’s East and South Asian offices generated trade finance volumes of US$53bn. Annualised, this works out as US$70bn – an impressive sum for a bank that is becoming more and more visible
in regional trade finance transactions.
SBI may be 200 years old, but it is also vying to be among the first movers as India’s banking sector embraces the digital age. SBI has been extremely active in keeping up to international standards. The bank is rolling out Misys’ Fusion banking Trade Innovation software which will assist with automating the trade process. Last year, it implemented Accuity’s compliance screening solution, which ensures banks are covered on anti-money laundering regulation on a global basis. Add to this the bank’s moves towards harnessing Big Data and incorporating it into its service offering, and it has been a busy and successful year for SBI.
For these achievements and more, GTR has awarded SBI best trade finance bank in South Asia.
Best trade finance bank in Central Europe and Eastern Europe: VTB
VTB bank realised over R180bn (about US$3bn)-worth of trade deals in 2016, giving it a seven-fold growth in its trade finance books over the last three years.
The deals included loans with banking and corporate counterparties in 48 countries across Europe, Asia, Africa, and North and South America, demonstrating the bank’s ability to support customer trade worldwide.
Conventional trade finance solutions are structured in close co-operation with international banks. Despite the challenging economic environment, VTB has successfully created new relations and actively co-operates with more than 100 financial institutions worldwide, offering both short and medium-term trade financing through letters of credit.
VTB has continued to focus trade support in emerging markets, illustrated through its transactions in China, India, Brazil, Egypt, Indonesia, Peru, Nepal, Pakistan, Turkey, Bangladesh, Algeria, Ethiopia, Angola and Russian Commonwealth countries.
In the period 2015 to 2016, the bank’s co-operation with Chinese banks, aimed at financing Sino-Russian trade, saw trade flows exceed Rmb28bn.
VTB’s China-related trade and export finance exposure as of end 2016 experienced a near two-fold growth year on year.
The bank works in close co-operation with major export credit agencies (ECAs) including Sinosure, Euler Hermes, Coface, OeKB and Atradius, and has successfully offered its customers direct ECA-covered financing.
A key partner for Russian ECA Exiar, VTB has an extensive pipeline of Exiar-covered deals exceeding R200bn, consisting of projects in industries including machine building, power generation, industrial infrastructure and chemicals.
Best trade finance bank in Western Europe: Crédit Agricole
Crédit Agricole is one of the largest global banks with 52 million customers and a presence in 52 countries. Due to its extensive global reach, coupled with its strong financial standing, its trade finance offering in flow and structured business ranks among the top.
The trade finance business is centralised with its corporate and investment banking arm, and benefits from integration between the group entities in various client sectors including large corporates, sovereign and financial institutions.
The bank’s trade finance offering has earned high recognition from its clients, particularly for its structuring capabilities of complex transactions, customised trade solutions and risk mitigation.
The bank has a central structuring team based in Paris that shares technical knowledge to support around 100 local and regional front-office trade finance staff who help clients structure their financing through various methods. These include open account, contract financing, progressive payment discounting, financial and trade guarantees and letters of credit (LCs), among others.
Crédit Agricole is a recognised pioneer in the SwiftNet solution after being the first bank globally to go live on SwiftNet with guarantees, LCs and documentary collections. The bank is an active member of ITFA, ICC, Baft, Unico Banking Group and Cadimpex and seeks to contribute in developing trends and practices in global trade.
Best trade finance bank UK: NatWest
Export business is a key focus areas for NatWest and, since 2011, the bank has worked together with UK Export Finance (UKEF) to facilitate over £1.1bn of export contracts. Today the bank is responsible for 70% of the value of all trade finance instruments provided under UK short-term export schemes.
In 2016 NatWest pledged to support 15,000 UK businesses to export to overseas markets by 2020. The bank has also launched capital import finance for UK SME manufacturers that want to source heavy equipment from overseas, and introduced a tooling trade finance loan solution to help SMEs supply niche components to UK car manufacturers.
NatWest is also one of the banks that has teamed up with the UK’s department for international trade (DIT) to kickstart a new online directory of exporters to help link UK companies with global buyers as part of bigger plans to get digitised. It has agreed to back the government’s drive to populate the directory, which potential global customers can search to find UK companies that are ready to supply the products and services they need.
Alison Rose, CEO of commercial and private banking at NatWest, says: “Businesses’ goods or services might be in demand in a new country, but taking the plunge can be daunting. We don’t want that to hold any of our customers back and will help as many as possible take the next step in their growth.”
Best trade finance bank in the Middle East and North Africa: First Abu Dhabi Bank
While supple chain finance has increased in popularity globally over recent years, the financing solution is still nascent in the Middle East and North Africa region.
With the aim to bring more liquidity into Middle East supply chains, First Abu Dhabi Bank (FAB) launched a fully automated digital supply chain finance platform in 2016, an initiative which drove GTR to award it the best Mena trade finance bank.
The web-based platform gives clients a real-time overview of their SCF-related information and allows their suppliers – mostly SMEs – to receive payments faster. In 2016, the bank onboarded several clients, including the UAE’s Etihad Airways and China State Construction Company, and their suppliers.
“The programme caters to the region’s leading corporates’ much-awaited desire for a robust cash flow and supply chain management system which adds real value to their supply chains,” FAB’s submission reads.
FAB is the result of a merger between National Bank of Abu Dhabi (NBAD) and First Gulf Bank (FGB) in July last year, forming the largest bank in UAE with assets of AED642bn (US$175bn). The new bank has been described as an engine of UAE growth, with a strong focus on the development of the country’s private sector.
The bank says in its submission that it plans to further invest in trade finance, as well as new technologies. Its investment into its trade finance technology platform was more than US$20mn in 2016.
Best trade credit and political risk broker: BPL Global
Winning GTR’s award for the seventh year in a row, BPL Global continues to prove itself as a leading broker in the trade credit and political risk market.
2016 was not only characterised by extensive growth for BPL Global, but it also saw the successful implementation of the company’s long-awaited succession plans.
Having appointed two new managing directors in late 2015 to take the company forward, and growing its team size by over 10%. This comes as one of the founders, Anthony Palmer, recently retired.
“It’s been the first full year of transition for Sian Aspinall and myself and we feel it has been a success,” James Esdaile, managing director of BPL Global, tells GTR. “The popularity and demand of the product is increasing and clients’ demands are becoming more voluminous and complex. We’ve staffed up to cater for that.”
The company now comprises 94 staff members across its offices in London, Paris, Singapore, Hong Kong and Dubai.
Despite changes to its senior management, BPL Global has shown its continued commitment to its core values as an independent broker, owned by its own employees.
“The vast majority of our broking staff have a level of equity in the company, so they have a medium to long-term incentive to make sure that the company succeeds. That inspires loyalty and commitment to the company’s culture and ethos. It’s a recipe for success that has worked,” Esdaile says.
“Despite the current M&A trend in the insurance market, and a body of opinion suggesting that we can’t continue as an independent employee-owned firm, that is exactly our intention.”
Best trade credit and political risk underwriter: Chaucer
The recent collapse in commodity prices globally has produced a flood of trade credit and political risk insurance claims, especially in developing countries. As such, 2016 was not without its challenges for underwriters in the market.
It was Chaucer’s leadership and responsibility to support its clients in recovering through those challenging times that drove GTR to award it the top spot in this category.
Committed to being the foremost underwriting team in the trade finance market, Chaucer leads approximately half of the policies it underwrites, as such playing an important role in solving problems and ensuring the market can trade effectively.
Speaking to GTR, Nick Kilhams, senior political risk underwriter at Chaucer, says that very few of the underwriter’s clients were immune to the problems stemming from the commodity price crunch.
“Our clients, being the trade finance banks, commodities traders, etc, buy a high volume of insurance, although they also undertake many transactions which are uninsured,” he says. “We worked especially closely with our client base last year to negotiate the choppy waters successfully. This sometimes meant the reprofiling of risk, rescheduling of debt and additional efforts to resolve as many problems as we could.”
Despite a challenging market, 2016 saw the company growing its capabilities in trade credit and political risk, adding several new underwriters to its team.
Looking to expand where its clients are investing, Chaucer also entered into a joint venture with Axa Africa Specialty Risks that is dedicated to covering specialty insurance lines in Africa.
Best development bank in trade: EBRD
The European Bank for Reconstruction and Development’s (EBRD) Trade Facilitation Programme (TFP) has continued to successfully promote and facilitate international trade to, from and within countries in Central and Eastern Europe, the Russian Commonwealth and the southern and eastern Mediterranean.
Under the TFP, the bank offers guarantees to international commercial banks, thereby covering the political and commercial payment risk of transactions undertaken by participating banks. At present, over 100 issuing banks in 27 countries participate in the TFP, working with over 700 confirming banks and their subsidiaries throughout the world. Since its inception in 1999, TFP has facilitated more than 19,000 foreign trade transactions worth a total of €14.4bn. In 2016, TFP supported a total 1,359 trade finance transactions totalling €1.45bn.
The EBRD’s activities are particularly relevant in the context of today’s changing global backdrop. Trade activity in EBRD countries of operation has shown few signs of growth in the past three years, and the continued effects of the banking crisis of 2008 and 2009 have yet to abate. The risk aversion triggered has been exacerbated by the implementation of Basel III capital requirements, coupled with stronger know your customer (KYC) and anti-money laundering (AML) requirements that drive up the costs of doing interbank business.
As a result, foreign commercial limits to EBRD partner banks have decreased significantly, with some markets suffering systemic disruption, and traditional channels of financing severely distressed or withdrawn altogether – such as in Ukraine, Greece and Cyprus. In this context, the EBRD and its TFP remains highly relevant to partner banks which have limited alternative sources of trade finance support.
Best alternative trade finance provider: Greensill Capital
Greensill Capital’s unique model and diverse sources of funding to provide supply chain finance (SCF) is what earned it this year’s GTR Leaders in Trade award for best alternative trade finance provider.
While banks have historically provided funding from their own balance sheet and distributed these assets to other commercial banks, Greensill uses on balance sheet funding and proprietary funds, but also traditional bank investors and the capital markets.
The firm offers exchange clearable ‘SCF notes’ to investors – the first of their kind in the market. These are placed with Greensill’s proprietary funds and a multitude of institutional investors.
The financier also recently launched an SCF fund enabling corporate treasurers to use their cash reserves to make positive returns in a diverse pool of SCF assets. With the fund, companies that have generated excess cash from SCF programmes can make short-term returns until the capital can be deployed productively in their business.
By partnering with various technology providers instead of performing the onboarding process manually, Greensill can expand its reach throughout the supply chain, from large multinational companies to SMEs. One of its programmes saw an impressive 6,300 suppliers enrolled.
“Working with multiple platform partners allows us to adapt to our clients’ preferences and capabilities, whilst remaining agile and able to accommodate new technologies and services emerging in the fintech landscape,” Greensill says in its submission.
Over the past five years, the firm has grown exponentially, and over the past year its global mandates have increased by 27 programmes. In December 2016 alone, Greensill funded over US$2.5bn of incremental assets.
Best trade finance software provider: Misys
In 2016, Misys again saw double-digit growth in its global trade business as banks continued to invest in the transformation of trade finance platforms. This growth is just one of the reasons why GTR awarded Misys as the winner in this category.
According to the company’s submission, demand has centred in particular on the need for quicker turnaround of trade products (especially guarantees); reduced risk and cost in the management of trade finance; and the revolutionary effects of globalisation and digitisation on the trade ecosystem.
Amongst its many achievements last year, in Q4 Misys closed a multi-country contract with Commonwealth Bank of Australia to support the bank’s international expansion. Central to this was Misys’ ability to deliver a global platform on the cloud, and the win highlights positive market response to news in 2016 that Misys would deliver its entire portfolio of solutions on the cloud.
In tandem with new business, Misys has continued to prove its position as a market leader with a series of major implementation successes, including with State Bank of India.
On the innovation side, Misys has leveraged its new technology architecture (FusionFabric) and FusionReactor Innovation hub to deliver new thinking and enhancements to its trade solutions. From the FusionReactor, the company has completed a blockchain proof of concept for dealer finance, which gives visibility and security to all transaction participants. Misys is promoting standardisation of this new technology to increase the chances of the solution being adopted in a scalable manner.
In addition, Misys is using its ecosystem and its open APIs to embrace collaboration and pool best-of-breed technology resources with the ultimate goal of advancing the trade finance industry as a whole, and in consultation and partnership with its global client base of over 230 banks.
Best fintech disrupter: Mitigram
While more regulation and a lower risk appetite have led many financial institutions to tighten their credit limits and pull back from certain markets, other players are seeking to address the challenges and cover the emerging finance gaps.
One of them is Mitigram, a Swedish start-up, which GTR has awarded as best fintech disrupter for its use of innovative technology to drive ﬁnancial inclusion while making transactions more efficient and transparent, and fully digital.
Since its launch in November 2015, the platform has already facilitated over US$3bn of trade finance in 70 countries.
It works as a marketplace, where trade finance players – companies, bank, insurers and ECAs – can meet and collaborate on the financing and risk coverage of trade. It allows banks to bid for corporates’ trade finance business on a case-by-case basis, while companies can easily extend their network and compare and accept quotes in a few clicks.
Via a simple web-based interface, the platform streamlines the process of pricing trade finance transactions, and gives a complete and accurate centralised overview of the participants’ ongoing deals and activities. It also optimises the use of data insight, gathering and aggregating transaction and pricing-related data to provide in-depth analytics for strategic decision making.
“Mitigram’s digitisation of trade finance relationships is generating strong interest among exporters and financial institutions that see the value in the way Mitigram disrupts the trade finance marketplace, by allowing market participants to evolve away from email, telephone and proprietary platforms and bringing transparency to the market,” the company’s submission reads.
Best export credit agency: Euler Hermes
Once again, Euler Hermes has won the award for best export credit agency, reflecting its strong commitment to support exporters through a range of new initiatives.
For one, the German ECA initiated a major collaboration with Moody’s in 2016 to better serve European SMEs. Moody’s chose Euler Hermes for “the quality of its credit expertise, detailed knowledge of the SME sector, and for the scope of its analytical coverage”.
The partnership involves the launch of new credit ratings services for SMEs and mid-cap companies in Germany, followed by other European countries later in 2017. By expanding credit ratings coverage for SMEs, the aim is to bring more transparency for market participants and help companies attract capital.
Another of Euler Hermes accomplishments is its world-class research: in 2016, the ECA developed risk analysis and intelligence on companies and trade sectors in 194 countries, providing unique information on non-payment data and insolvencies across the globe.
It also created a new online platform for economic research, from which more than 80,000 reports have been downloaded, amongst a range of other research initiatives.
Euler Hermes also stands out for its focus on digital innovation: following the launch of its digital agency in 2015, the ECA partnered in November 2016 with blockchain solution provider Fluent (recently rebranded as Hijro) to explore opportunities offered by blockchain technology in the trade finance industry. Through the collaboration, Fluent will use Euler Hermes’ API-based Single Invoice Cover to offer single transaction credit insurance on its Trade Asset Marketplace.
Best trade finance law firm: Sullivan & Worcester
This is not the first time for Sullivan & Worcester to scoop the first prize for best trade finance law firm, reflecting its strong practice in the trade finance space. Nevertheless, competition was tight in this category.
The core team in London advises more than 35 major trade finance banks, as well as funds, corporate borrowers, agents, organisations and insurers, with a special emphasis on developing markets, including Africa, Asia, the CIS and Latin America.
In 2016, Sullivan & Worcester advised on several of the awarded GTR Best Deals. For one, it consulted JP Morgan, which acted as MLA and agent, on a US$34.8mn direct lending facility made by UKEF to the Kurdistan regional government of Iraq. The loan, which is the first to be entered into by the regional government, will finance the initial phase of a landmark US$1.2bn water and wastewater treatment infrastructure project.
The law firm also worked on a winning deal in Ghana, advising UK SME Dints International, a specialist equipment supplier, on a US$60mn-plus contract with one of West Africa’s largest gold producers.
Other remarkable 2016 deals include advising Deutsche Bank on the annual US$1.8bn Ghana Cocobod pre-export, Santander on a multi-million euro UKEF buyer credit facility for the government of Ghana, and a consortium of international Scandinavian banks on a commercial loan for a telecommunications equipment purchase in East Africa.
2016 also saw Sullivan & Worcester’s trade practice grow, increasing its capabilities in dispute resolutions, regulatory and insurance in both London and New York.
Best correspondent bank: BNY Mellon
At a time when correspondent banking is the subject of one negative news story after another, BNY Mellon’s efforts to maintain and improve its network are laudable.
In the biggest technological transformation in its history, the bank has launched its cloud-based platform, Nexen, consolidating proprietary solutions and those of select third-parties and clients onto a single platform. This allows business partners to access applications on trade processing and reporting, open account collections, document delivery and receivables management easily across various devices. Nexen’s application programme interfaces (APIs) enable efficient integration of a client’s in-house user interface with BNY Mellon’s trade service for data exchange and aggregation.
Four APIs are currently live for trade finance export collections, trade finance inquiries, letters of credit and trade document image delivery.
Through Nexen, BNY Mellon also offers third-party apps to help clients expand their trade offering, as well as options such as Swift message re-routing.
Banking partners already using Nexen include two European banks.
In other recent developments, BNY Mellon’s global head of trade business development, Dominic Broom, has been appointed a member of the executive committee of the International Chamber of Commerce’s Banking Commission. He intends to use this position to advocate for local and regional banks, and in turn, communicate developments to them.
BNY Mellon offers trade services in more than 100 markets, with a trade branch presence in the US, Germany, South Korea, Japan, China, Hong Kong, Singapore and Taiwan. The bank aims to leverage its extensive network to create trade opportunities and support and facilitate the growth of its regional and local bank client base.
Most innovative bank: HSBC
HSBC has been one of the most active players in the nascent distributed ledger technology (DLT), or blockchain, space as it kicked off in earnest over the past 12 months. The bank teamed up with the Bank of America Merrill Lynch and the Infocomm Development Authority of Singapore (IDA) in August 2016 to announce one of the early successful applications of blockchain technology in trade finance.
The three organisations replicated a letter of credit transaction using DLT, in a proof of concept that HSBC claims shows that the technology can boost the speed and efficiency of trade finance transactions. As many banks struggle to get to grips with blockchain technology, HSBC was among those showing that it has an actual place in the business.
Further to this, the bank is a member of the R3 consortium along with 75 other financial houses, working towards an industry-wide solution for blockchain. Add to these activities an industry first in India, where HSBC and Reliance Industries teamed up with Bolero to complete the country’s first export with an electronic bill of lading, and it’s clear that HSBC has been an innovator in the space over the past 12 months. We’re excited to see what’s next on its fintech agenda.
Bank that has made a significant contribution to sustainability: Commerzbank
Commerzbank’s continued commitments to sustainability saw it become the first German bank to be listed in the STOXX Global ESG Leaders Index in 2016 – ranking it among the top 300 companies worldwide that best account for environmental, social and governance (ESG) criteria in their activities.
Last year the bank worked with various organisations and initiatives to promote sustainability, including contributing to the UN’s 2016 International Yearbook – which aims to highlight the key role the banking industry can play in financing a sustainable global economy. It also joined the International Chamber of Commerce’s 2016 sustainable trade working group, as well as the Institute of International Finance’s green finance working group. A signatory to the UN sustainable development goals and the German sustainability code, Commerzbank has worked to ensure human rights, fair labour conditions, environmental protection and anti-corruption measures are respected in trade finance.
Also, under new guidelines, the bank will no longer finance projects related to new coal mines, nor the construction of new coal-fired power plants. Other coal-exposed infrastructure projects – such as rail networks and ports of loading – will be reviewed on a case-by-case basis with respect to environmental and social risks.
The bank says it analyses around 5,000 potential transactions each year through its reputational risk management department for sustainability and ESG-related risk. If trade cannot meet Commerzbank’s sustainability criteria, it will not be financed. For instance, as the first German bank to join the Roundtable on Sustainable Palm Oil, Commerzbank will only facilitate transactions with palm oil suppliers that can prove their supply chain will not contribute to rainforest destruction.
Best supply chain finance bank: BNP Paribas
As the majority of global banks continue to increase their focus on supply chain finance (SCF), competition in this category was fierce. BNP Paribas stood out with its holistic approach covering the whole working capital cycle from receivables financing to trade payables. But what really differentiated the bank was its corporate social responsibility (CSR)-driven supplier financing programme, implemented for Puma in 2016.
The programme ensures products are manufactured responsibly by Puma’s 400 worldwide suppliers, both from a social and environmental standpoint. Puma’s goal was to exert influence and enforce international standards along its supply chain, and BNP made this possible by presenting it with an SCF product adjusting pricing conditions to the company’s social and environmental rating of its suppliers.
Among other innovations, BNP now offers receivables purchase programmes either on an obligor-by-obligor basis or on a granular portfolio of receivables basis. The bank can also use its dedicated subsidiary company UTEXAM, to finance inventory by offering buyers “flash title” and just-in-time management of raw materials and semi-finished goods, as well as by purchasing suppliers’ finished products.
Finally, BNP’s ‘work-in-progress financing’, put in place for a train manufacturer on a contract with Swiss Federal Railways, impressed GTR with its flexibility. According to the credit agreement, the client assigned a share in identified future receivables related to the train to the bank, in lieu of traditional advances. The assignment can be executed at financial closing or on an uncommitted basis at a later stage, and becomes effective at the date that the client meets certain predetermined milestones, giving it the right to invoice the buyer.
Best export finance bank: SMBC
SMBC is one of the few genuinely full-service global banks in export credit agency (ECA) finance. And it is its proven expertise across all major roles, including financial advisor, ECA co-ordinator, mandated lead arranger and agent bank that drove GTR to award SMBC as the best export finance bank.
“As an institution, we have market-leading positions in project finance, asset finance (including shipping and aircraft), financial institution finance and corporate/sovereign risk deals and successfully combine these with all with our export finance expertise to achieve success for our clients,” reads the bank’s Leaders in Trade submission.
“As one of the global systemically important banks, we have a global reach and a global client base which allows us to successfully serve both borrower clients and exporter clients.”
SMBC has a strong network of teams dedicated to ECA finance across a global platform, and while Asia is rightly seen as the bank’s natural backyard, its ability to deliver globally is what sets it apart and allows it to operate at the very top level of the industry.
While it is natural that it is the large, multi-ECA deals that SMBC has worked on that tend to grab the headlines, the bank is equally at home supporting its clients in small, single ECA deals, often with borrowers who may be new to the ECA product and therefore need extra guidance and support.
Best commodity finance bank: Deutsche Bank
Deutsche Bank was judged the winner in this category on the grounds of its quality deals, ability to work with clients in good and tough times, depth and breadth of expertise, and advocacy of the safety of trade finance to the wider regulatory community.
When prices are high, anyone can do a commodity deal, but it’s harder to make money safely when prices come down, and that is when structures get tested. Deutsche Bank has been leading the way on this since the arrival of its managing director, John MacNamara, some 18 years ago to set up what is now the bank’s flagship structured commodity trade finance (STCF) business.
Despite a difficult 2015/16, where the safety of commodity finance was under more scrutiny than ever, STCF deals have been “flowing out of Deutsche Bank”, reads the bank’s Leaders in Trade submission.
The focus has been on structuring the right sort of deals: in other words, deals where trade gets paid, all around the world.
Rather than going for volume and maximum participation rates, the deployment of pre-export finance, pre-payment finance, reserve-based lending, borrowing base finance, with bullet-proof documentation, great syndicates and inspired offtaker contracts are a trademark of this bank.
Deutsche Bank’s SCTF team covers Asia Pacific, Emea and the Americas with a team of 43 experts all in.
Best global trade finance bank: HSBC
According to the consultancy Oliver Wyman, HSBC is the biggest trade bank in the world. For many in the market, it continues to set the gold standard and so, it’s not a huge surprise that it walks away with this prestigious award again. In a difficult market, HSBC continued to close large trade deals through 2016.
In one such deal the bank was underwriter, mandated lead arranger and account bank for the US$3bn four-year pre-payment facility taken out by Kazakhstan’s state-owned oil company KazMunayGas (KMG) last year. The deal is to monetise the production from KMG’s Tengizchevroil oilfield in Kazakhstan, with the oil set to be a key source of exports for the former Soviet republic. HSBC worked closely with Vitol, the world’s largest oil trader, to structure and execute the deal.
In a sign of its geographical breadth, the bank continued to support renminbi (Rmb) transactions, even when it has been a slow year for the Chinese currency’s journey towards internationalisation. Over the course of 2016, HSBC became the first international bank to support Rmb transactions in all six continents. China may have put the brakes on the liberalisation programme, but when it resumes, you can be sure HSBC will continue to be heavily involved.
Congratulations to HSBC, the best trade finance bank in the world.