Related News

Trade Leaders Interview: Marie-Laure Gastellu, Société Générale

ETG closes first sustainability-linked credit facility

Trafigura upsizes samurai loans

ECAs and banks forge US$2.5bn deal for Chile copper mine

Trafigura bags US$5.6bn European RCF deal

Japan was the most active trade finance market in 2012, despite a 5% fall in global volume, according to Dealogic’s trade finance review 2012.

Total activity fell to 718 deals, down 36% on 2011’s figures. Excluding sole-bank loans, however, trade finance volume rose by 3% to US$139.1bn, possibly highlighting the growing trends of risk spreading and export credit agency (ECA) coverage.

ECA financing volume rose from US$69.7bn in 2011 to US$114bn last year, while structured commodity and supply chain finance volumes also increased.

The most active market was that of Japan, which reported trade finance volumes of US$16.8bn, followed by Turkey (US$15.1bn) and Australia (US$11.8bn).

The largest deal was the massive Ichthys LNG transaction – Japanese in origin – inked late in the year for US$16bn.

Bank of Toyko Mitsubishi (BTMU) was the most active, meaning Japan completed a trade finance hat-trick in 2012. BTMU was top mandated lead arranger (MLA) for transactions including sole-bank loans, all trade finance and ECA financing excluding aircraft and shipping.

Chang Hwa Commercial Bank was the top MLA for supply chain finance, while BBVA led the rankings for trade flow business. For structured commodity finance, Société Générale was the top MLA.

Toru Masutani, head of ECA, commodities and trade finance at BTMU tells GTR that the bank’s 2012 performance was due in part to its global presence, which reflects the business of its clients in the trade finance space, but also to its involvement with ECAs.

He continues: “Nearly 70% of the deals registered were ECA finance, and this is one of the areas where BTMU has expanded our capabilities in the past few years. As a Japanese bank, BTMU’s natural strength with ECAs has historically been with the Japanese agencies. BTMU has however broadened its capabilities in the past three years by deepening its relationships with many other agencies globally by expanding our global ECA team in Tokyo, London, New York, Sao Paulo, Singapore, Hong Kong and Shanghai focusing on their respective ECAs and clients.

“At the same time, after the financial crisis, our clients’ attention towards ECA-backed finance has become strong, and BTMU was able to respond to such needs thanks to our bank’s global network. In the past years, we have seen an increasing number of transactions involving cross-regional efforts and BTMU’s global reach is now ideally placed to provide this service. BTMU has strongly committed to this area of business, and will continue to do so in the future.”

Commenting on the strength of Japanese banks in the trade finance space, Masutani says they have been able to step in to fill funding gaps left by the previously dominant European players, since the financial crisis had a comparably smaller impact in Japan. He adds: “Increasing finance demand in Asian countries, where we have our strength, is also a factor for the Japanese banks’ performance. Deal volume in Asia-Pacific has tripled in FY 2012 (US$54bn) from FY 2011 (US$18bn). Ongoing infrastructure developments and natural resources available in Asia are creating demand for equipment and engineering services exported from overseas markets, and Japanese banks were able to capture these trade flows.”