The number of large corporates in Asia that use trade finance has increased by 21%, a Greenwich Associates report shows.

Figures from Across Asia Corporates’ Use of Trade Finance Increases report details that in 2013, 72% of large corporates (including MNC subsidiaries) in Asia were using trade finance, a 21% increase from the 51% adoption rate seen in 2011.

Over the same period, the report highlights that the average spend on trade finance by these large corporates rose by 300% from US$1.2mn in 2011 to US$4.8mn in 2013.

The report adds that the increased trade finance adoption rate is down to two primary reasons: “As an alternative source of financing, and for process improvement in working capital management.”

A number of local providers in Asia have expanded operations in the region to tap into this sentiment, and, with “aggressive pricing”, they have won a number of client relationships. A key theme from interviews conducted with firms in the region for the report was that “when selecting a provider, companies are looking for banks with international networks to match their trade flows” intra-regionally.

The report notes that “leading providers on average lost a few points of market penetration, as a long tail of local and emerging regional banks picked up relationships”.

Local providers increased their respective market shares as a result of “ready balance sheets and competitive pricing” and this is helping to fuel an increase in the use of trade finance in Asia among large corporates.

“The strong and growing supply of trade finance in Asia has resulted in a highly competitive market,” says Paul Tan, principal of banking and capital markets in Asia Pacific at Greenwich Associates.

However, leading banks have maintained their market share dominance in the region, with 42% of large companies across Asia using HSBC, the report adds. Standard Chartered, Citi, Deutsche Bank, and ANZ follow suit with 36%, 31%, 27% and 26% respectively.

According to Greenwich Associates data, HSBC recorded high market penetration levels in Hong Kong (61%), Singapore (46%), India (46%), and China (37%).

Tan adds in the report: “Over the past 12 months, ANZ Bank and BNP Paribas have gained notable visibility in Asian trade finance and are now emerging as significant alternatives to the regional incumbents.” ANZ Bank attained a 26% market penetration level.

The statistics stem from 423 trade finance interviews conducted by Greenwich Associates, between April and June 2014, with CFOs, finance directors and treasurers of firms in the region.