Major banks’ financial results for 2023 show trade finance activity is slowing in some key markets, weighed down by sluggish global trade volumes and weaker commodity prices.

While high interest rates in many developed countries kept trade finance income stable, many lenders recorded falls in loan volumes and largely flat income from fees and commissions.

Banks in Europe and Singapore mainly reported slight declines in trade revenue, according to a review of available reports in selected markets, although lenders in the UAE have bucked the overall trend and notched up growth in both volume and revenue.

Only a partial picture can be gleaned from reporting so far, because many banks are yet to publish comprehensive full year results or do not disclose specific earnings from trade products.


UK and Europe

Trade finance activity at HSBC and Standard Chartered remained largely flat, consistent with their half-year reporting.

Revenue from HSBC’s global trade and receivables finance business dropped by US$100mn year-on-year, a decline of 2%. The bank attributed the fall to lower average balances in Europe and Asia and “the softer trade cycle”. But the bank also noted wider margins in the UK and Latin America, as well as a 3% lift in trade finance fee income during the year.

CEO Noel Quinn was upbeat about future opportunities, declaring that the bank had supported US$850bn worth of trade during the year “with the diversification of supply chains leading to revenue growth opportunities for HSBC”. The bank also said it now controlled just over a quarter of the trade finance market in Hong Kong, lifting market share by 6.6% since 2020.

But the bank played down the likelihood of strong growth in Asia this year, noting that “growth is also expected to be moderately slower in 2024 relative to 2023” in China and Hong Kong. “The economic boost from post-pandemic reopening has faded, and slower global growth and low trade volumes are expected to moderate activity.”

At Standard Chartered, trade activity was similarly muted. Trade and working capital operating income slid from US$1.34bn in 2022 to US$1.29bn last year, which the bank said was a fall of only 1% when currency fluctuations are taken into account. Fee income for trade and working capital fell by around US$18mn.

The lender attributed the 1% drop to “lower balance sheet and contingent volumes due to a reduction in economic activity and clients’ preference for local currency financing provided by local banks”, a trend also noted by banks in Singapore. The slight decline was partly offset by higher margins from a focus on “higher-returning trade products”, the bank said.

Operating income from sustainable trade lending, although only a fraction of overall earnings, shot up by 60% last year to US$96mn.

Standard Chartered, which earns a large portion of its revenues in Asia, is also wary about economic uncertainties in China stemming from the country’s troubled real estate sector. “Given China’s importance to global trade a slowdown would have wider implications across the supply chain, especially for its trading partners, as well as to countries which rely on it for investment, such as those in Africa,” the bank warned in its results. “However, opportunities arise from the diversification of intra-Asia trade and other global trade routes, and growth acceleration in South Asia, especially India.”

The cautious tone has not stopped Standard Chartered setting itself a target of growing its trade and working capital income by 6-8% between 2024 and 2026.

Most large European banks did not disclose specific earnings from trade in their 2023 reporting, or are yet to publish comprehensive annual reports.

Of those which gave clues, Austria’s Raiffeisen said income from trade finance and some other transaction banking services was down, but did not provide figures. Deutsche Bank CFO James von Moltke told analysts that trade finance “has been relatively muted”.

ING reported a 29% year-on-year jump in profit from daily banking and trade finance to €2.1bn, but said the growth had come mainly from payments and cash management. Trade and commodity finance income “decreased slightly due to lower commodity prices and stagnant markets”, the bank said. Its Dutch rival Rabobank also attributed its “smaller trade and commodity finance book” to lower commodity prices.

Group BPCE, the parent company of Natixis, reported a 15% year-on-year jump in global trade revenue, but did not provide specific figures.

In the trade finance hub of Switzerland, Banque Cantonale Vaudoise said in a presentation to investors that average trade finance business volumes slumped by 28% in 2023 due to “geopolitical tensions, lower commodity prices, and [a] weaker US dollar”. Fee and commission income on lending operations fell by almost a quarter.


United Arab Emirates

The trade finance picture in the UAE is more upbeat, with banks largely reporting growth in their trade finance businesses.

At ADCB, trade finance commission income jumped by 11% to AED608.2mn (US$16.5mn) last year. At Emirates NBD the same metric rose to AED1bn (US$272.3mn), from AED878mn in 2022. The lender said loans and receivables to trade customers stood at AED32.4bn at the end of 2023.

Mashreq’s loans and advances to trade customers stood at AED22bn (US$5.9bn) at the end of 2023, with a further AED1.9bn in Islamic trade lending, compared to AED17.1bn a year earlier.

Trade-related loan volumes fell to AED32.2bn at First Abu Dhabi Bank, from AED34.1bn (US$9.2bn) in 2022, although trade finance fee income rose to AED891.8mn, and fee-related expenses fell.

Trade contingencies, which include letters of credit and guarantees, grew to AED165.2bn. Lars Kramer, FAB’s chief executive, told analysts he bank is eyeing trade growth as it expands its international business.



Lenders in Singapore reported largely flat performance in trade in their half-year results, and the full-year accounts show that a slower trade environment persisted through the rest of the year, although strong interest rates helped offset tepid underlying activity.

An average interest rate of 5.57% pushed up gross interest income on DBS’s trade assets by 87%, climbing to S$2.4bn (US$1.7bn). But underlying trade loan volume declined by S$3bn over the year, and the bank also recorded a 2% drop in transaction fees from trade, remittances and other products, which it attributed at least in part to slowing trade finance activity.

The lender is seeing accelerated repayments as some clients move their borrowing to mainland China to take advantage of lower interest rates, CEO Piyush Gupta told analysts.

But in a possible sign of recovery, Gupta said growth returned in the last quarter of 2023, telling a media briefing: “The good news is that, after several quarters, we had S$1bn [volume] growth in trade loans as pricing improved, especially in energy related trades from Korea and India.”

Lim Soon Chong, the lender’s group head of global transaction services, tells GTR there are early signs of growth returning this year: “There are green shoots of growth despite the broad-based slowdown in trade finance last year due to shifting patterns. We have seen strong demand for commodity trade financing, guarantees to enable infrastructure projects, and supply chain financing that support SMEs supplying large buyers.

“In the area of transaction fees, DBS defended our market share, underpinned by newly captured opportunities in renewables and infrastructure projects, while continuing to focus on supporting key clients,” he said, adding that expected rate cuts in the second half of 2024 should reignite appetite for trade finance loans. 

Similarly, OCBC said trade-related fees grew in the second half of the year compared to the first six months, but overall experienced “weak trade loan demand”.

UOB reported a 6% drop in trade-related net fee and commission income to S$307mn, with the decline worsening throughout the year.

Chinese banks have not yet reported full year results, while Japanese and Indian lenders are due to report in April.


United States

Citi is the only major North American bank to report trade-related revenue, declaring a 16% revenue boost in its globe-spanning treasury and trade solutions unit to US$13.65bn, driven mainly by higher net interest income.

The lender said cross-border flows rose by 23% in the fourth quarter, partially offsetting a 20% fall in non-interest trade income over the same period, due to a devaluation of the Argentinian currency. Excluding the devaluation, non-interest income rose 25% for the quarter, a Citi spokesperson said.


This story was amended on March 1, 2024, to reflect that non-interest income for Citi’s trade and treasury solutions unit rose by 25% excluding the devaluation of the Argentinian currency.