Despite 2012’s downturn in volumes, trade financiers remain optimistic that the market will return to form in 2013.

Speaking at Exporta’s Russia and Eurasia trade and export finance conference, a host of the industry’s most prominent figures spoke positively as to the prospects of the market in Russia and further afield.

About the forthcoming Basel III regulation which is likely to impact on banks’ liquidity, the head of the European Bank for Reconstruction and Development (EBRD)’s trade facilitation programme, Rudolf Putz said: “I don’t feel too negative about the upcoming situation. Yes, trade financing pricing may go up and it may be more difficult for SMEs to gain access to trade finance, but these companies are often willing to pay higher pricing, so long as they get the required access to finance. We shouldn’t expect a boom in 2013 or 2014, just steady growth. A boom will return when expenditure on equipment and machinery return.”

One of the most commonly cited reasons for optimism was the effect of export credit agencies (ECAs). Where the risk appetite of foreign banks in Russia has diminished, ECAs have quite often bridged the financing gaps, particularly since the inception of the Export Credit Agency of Russia (Exiar).

Many banks have begun utilising ECAs and while industry figures suggested that for many corporate clients pricing is not the sole consideration, all acknowledged the boon such agencies have had on their balance sheets.

When banks’ liquidity is pinched because of regulation, the utilisation of such instruments as ECA guarantees and the facilities of international financial institutions such as the EBRD may help keep the Russian trade finance industry buoyant, said the head of trade finance solutions for Promsvyazbank Oskana Gudzenko.

Exiar’s first deputy CEO Mikhail Karyakin confirmed to GTR that the ECA completed close to 20 transactions in 2012 – its first full year in business – and has transactions in the pipeline in industries across the board, most of which are outside the erstwhile dominant oil and gas sectors. Furthermore, Euler Hermes board member Dr Hans Janus said the agency had the three most successful years in its history of working in Russia in 2010, 2011 and 2012.

HSBC’s associate director of export finance and global specialised finance Alyson Cole confirmed that the bank closed 11 ECA-backed deals in 2012 and spoke of the growing influence of such instruments, in a market in which long tenors and affordable pricing have become so desirable.

However, a commonly held view is that while pricing is important, the private sector still has a key advantage over ECAs in practice: its efficiency. “The attractiveness of ECA finance depends on the timeline you’re working with,” said Commerzbank’s vice-president and group head of export finance for CEE and the CIS Jochen Anton-Boicuk.

Discussions also turned to the dominance of the state banking sector in Russia, which is said to cover 70% of the trade finance market. Again, though, financiers voiced the opinion that while competing on price and tenor with government institutions might be tricky, when transactions need to be closed with haste, the private sector holds an advantage.

Domestically, though, Sberbank’s head of export finance Evgeny Kravchenko says the bank has started to compete even on the tenor front. Another Russia banker told GTR that Sberbank has made working with SME exporters a priority.

Having returned to ECA-backed financing for the first time in a number of years with the Euler Hermes-backed finance it received from Commerzbank and on-lent to Irkut at the close of 2012, the bank expects to see such volumes increase further still in 2013.