French bank BNP Paribas has reported a “marked upturn” in its trade finance activities for Q2 this year, just weeks after its Swiss unit revealed heavy losses following the closure of its commodity finance business.

In its most recent quarterly results, the Paris-headquartered lender reports an upswing in its transactional banking activities, which covers cash management and trade finance – including a 14% increase in transaction numbers among its corporate clients compared to the first half of 2020.

The bank has also exceeded analyst expectations in its equities and prime services unit, and though corporate banking revenue was down 1.6% year-on-year, it remains up more than 13% from Q2, 2019.

Chief executive Jean-Laurent Bonnafé says the results “are solid and reflect the rebound in activity and our growth potential”.

The results contrast significant losses disclosed by BNP Paribas’ Swiss unit in its annual report for 2020, published in June.

The Geneva-based unit had announced net losses of around US$400mn, a significant slump from over US$15mn profit the previous year, which it attributed to “the major impact of withdrawing from the commodities financing business”.

The losses followed its decision to discontinue financing commodity trading, announcing a restructuring exercise in September that would affect 120 employees.

CEO Monique Vialatou said that decision was taken “against a backdrop of upheaval in the industry”, and was intended to align the Swiss unit’s businesses with the wider group’s corporate and investment banking model.

The bank was widely understood to have been spooked by a series of high-profile fraud scandals in the commodity finance industry that emerged during 2020.

BNP Paribas was revealed to be a creditor to Phoenix Commodities and GP Global, two UAE-based trading houses that fell into financial difficulties last year amid allegations of improper conduct.

In the case of GP Global, GTR revealed in February that the Dubai-headquartered company had been left with likely unrecoverable trade debts after irregular or fictitious commodity finance transactions, where restructuring officers did not believe there was any real underlying trade activity.

Several other European lenders have also withdrawn or scaled back exposure to the trade and commodity finance market over the past year, with many preferring to restrict credit to the top end of the market – a phenomenon dubbed by larger traders a “flight to quality”.

Though smaller traders report acute difficulties accessing funding, the wider impact on the trade and commodity finance market is not yet clear. Dutch trio ING Bank, Rabobank and ABN Amro – all of which also exited or downsized their trade finance businesses last year – are each due to file results later in August.

Meanwhile, in its H1 results for this year, also published this week, HSBC reveals net adjusted lending growth in trade finance of US$6.7bn, driven primarily by activity in Hong Kong and mainland China.