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Danske Bank has registered as a confirming bank on the IFC’s Global Trade Finance Programme, becoming the first northern European/Scandinavian bank to do so. “With the cover the programme has on especially Sub-Saharan countries we will find it of significant value to us and our corporate customer base in Northern Europe,” says Henrik Schriver, first vice-president, trade and export finance at Danske Bank.
Danske is also a confirming bank in the similar programmes from the European Bank for Reconstruuction and Development (EBRD) and Asian Development Bank (ADB).
“The ADB we have not used yet – basically because our risk capacity in Asia is sufficient in general,” says Schriver. “However, with the odd transaction on countries like Cambodia, Laos and others, we will no doubt make use of it in future.”
Danske Bank focuses much attention on trade finance, according to Schriver, and “as such takes pride in being able to facilitate our North European customer’s transactions. When one of our customers receives a letter of credit from a small bank in a high risk country we might not always be able to confirm such a transaction – and in such a cases it is of course of no use to our customers that we can confirm LCs on tier one banks in the same country.”
The EBRD programme has especially been valuable to the Danish bank, says Schriver, in these situations because it could cover some of the eastern European banks where Danske was a little tight on lines. “On top of that it is extremely “user friendly “for us as a confirming bank – easy documentation – and we have used the EBRD programme quite a number of times,” he adds.
With IFC’s similar programme and especially with its focus on Sub-Sahara we foresee a success as experienced with the EBRD, says Schriver. “We therefore immediately started the process of being accepted as a confirming bank with IFC when reading about the programme in GTR and we are now the first Scandinavian/North European bank being accepted.,” he says.
Trade finance in Danske Bank Group is organised with trade finance units in subsidiary banks or foreign branches. Apart from Denmark, the bank has trade finance units in Germany, Finland, Norway, Sweden (both Stockholm and Gothenburg) UK, Ireland and Poland. These operate quite independently in their local markets and are therefore being registered independently with IFC. This means they can operate directly with IFC and do not have to go through Danske Bank’s head office in Denmark.