The year 2009 was probably one that most in the banking industry wanted to end pretty quickly. Banks have hardly enjoyed the best reputation and for many, faced with nervous credit committees, there weren’t too many deals to be closed at at all, especially in the first half of the year.
However, the trade finance market has proven relatively resilient, and its image as a safe, secure asset class upheld. The strength of the market has clearly been reflected in the number of votes cast for GTR’s annual readers’ poll on the leading financial institutions in trade finance in 2009.
It is the second year running for the competition, and as you will see, we’ve added a couple of new categories.
The competition has been divided into a select group of categories, covering both regional achievements and specific financing expertise. It aims to really celebrate the achievements of those who have excelled in the trade, commodity and export finance markets over the past year.
Best global trade finance bank: HSBC
HSBC has done it again – scooping the top award for best global trade finance bank for the second year running. GTR was so impressed by the number of votes submitted for the bank, we even decided to give them the cover.
Commenting on the achievement, Lawrence Webb, global head of trade and supply chain at HSBC, says: “In a most challenging year, HSBC maintained a very clear commitment to meeting our customers needs.
“Our customers have valued not only the strength of our balance sheet support but also the consistency of our market expertise and guidance across multiple markets. That our customers were able to depend on us is testimony both to our commitment to trade finance and to the strength of HSBC’s trade and supply chain franchise globally.”
Webb notes that one of HSBC’s biggest achievements in 2009 was its success in being able to settle cross-border trade in renminbi between mainland China and other Asia Pacific markets. Indeed, it really was one of the pioneers of this kind of service.
“We were the first foreign bank to settle cross-border trade in renminbi between Mainland China and Hong Kong in July 2009 and within the next few months, in all our markets across South-East Asia,” comments Webb.
Under a pilot scheme launched by the Chinese government in mid-2009, banks are now able to close cross-border trade settlements between mainland China, Hong Kong, and the countries that make up the Asean [Association of Southeast Asian Nations] in renminbi.
HSBC closed a cross-border trade in Rmb in Hong Kong in July 2009. Since then, the bank has closed a number of Rmb transactions across the Asean region.
Offering trade settlement services in local Chinese currency will help HSBC tap into growing intra-Asian trade flows.
Closing renminbi transactions opens up new business opportunities for exporters within Hong Kong and the Asean countries, as Chinese companies will potentially look to increase their trading volumes if able to close transactions in renminbi.
In turn, companies importing from China and paying in renminbi are likely to be able to negotiate a lower invoice amount as sellers will no longer need to factor in currency exchange risks.
Aside from this significant achievement, the bank has further maintained its position as a market leader with the launch of its global trade confidence index in 2009. This index captures the views of over 3,500 importers, exporters and traders across 12 markets in Asia, Europe, the Middle East and Americas. It provides, as Webb observes, “a unique barometer of trade activity”, presenting data that can help the industry detect signs of growing or weakening confidence in key trade finance markets.
Best global structured commodity finance bank: Deutsche Bank
Deutsche Bank scoops the prize for best global structured commodity finance bank for the second year running. Its success appears to be down to its resilience and commitment to key markets, even when times get tough.
John MacNamara, head of structured commodity trade finance, at Deutsche Bank, comments: “Our ability to keep the doors to finance open via the structured commodity trade finance product suite – even in the darkest days of last winter when commodity prices collapsed – has been key to our success.”
Deutsche has proven itself to be a true leader in structured commodity finance, often being one of the first banks prepared to extend fresh money into difficult markets. This is evidenced in the ferrous sector in Ukraine and the metals sector in South Africa.
The bank has also been a strong supporter in the oil sector across the Emea (Europe, Middle East and Africa) region.
MacNamara adds: “And in some cases, we were almost alone in being able to roll over credit facilities for certain existing clients.”
Despite 2009 being a year of suppressed risk appetites and lack of liquidity, Deutsche has managed to secure an impressive level of new deals, according to MacNamara. “The amount of new business we have done this year, in the most unpromising of circumstances, has been a real achievement.”
The bank was lead co-ordinator on the US$600mn pre-export deal for TNK-BP and the US$1.2bn pre-export facility for Lukoil. It also led and coordinated facilities for Ukraine’s Ferrexpo and trading firm Duferco.
Fortunately, the bank has also avoided some of the large-scale restructurings witnessed during 2009. However, where it has had some exposure, such as in the Brazilian soya sector, MacNamara believes, “we have been very successful in meeting the expectations of both our clients and our partners in the syndications”.
Best global export finance bank: Société Générale
Société Générale takes the honours as GTR’s best global export finance bank.
Denis Stas de Richelle, global head of export finance, at Société Générale, comments: “Obtaining this title for the second consecutive year, demonstrates how, with Société Générale’s strong global network and innovative approach, the bank continues to address the evolving needs of its clients and provides support to win business overseas.”
According to Stas de Richelle, the outbreak of the current crisis and its spill over in the world has created both new opportunities and threats. “The trick is to adequately meet the increasing demand for export financing and the control of risk pressures, capital consumption and liquidity cost together with new regulations,” he says.
Stas de Richelle believes that the bank’s approach to developing optimised export finance strategies – involving a combination of multi-source ECA-backed financings, multilateral agencies structures and PRI-covered commercial loans in bilateral or club deals – has been fruitful in today’s market.
“An achievement shared with all our clients and partners in order to promote export financing solutions in tomorrow’s world,” he says.
Best commodity finance bank: BNP Paribas
BNP Paribas’ commodity finance team has secured itself the winning position in this category for the second consecutive year.
The bank’s success is as a result of a simple formula, says Guillaume Leenhardt, deputy head of E&C finance within BNP Paribas CIB, namely that it has been on a global basis – day in and day out – “the most consistent provider of financing to the commodity space for the past 30 years”.
Leenhardt notes that the recent turmoil within the industry in 2008/09 has “certainly reinforced that position”.
Leenhardt highlights BNP Paribas’ successful acquisition of Fortis as one of its biggest achievements in the last 12 months, and hails this move as a “major stepping stone for the bank’s future growth”.
He adds that with the integration of the Fortis teams in 2009, in the regions and sectors where BNP Paribas was less of an obvious global leader, the bank’s leadership should be strengthened. “We look forward to also collecting non-energy related awards in the years to come.”
Leenhardt also emphasises BNP Paribas’ key bankers’ ability to deal with and successfully restructure some of the most “delicate credit situations this industry has ever met”.
Overall, BNP Paribas has remained committed to new business throughout the year. “In the commodity finance business, we have continued to experience growth in our revenues in 2009 despite the sudden collapse of most commodity prices early this year,” explains Leenhardt.
“We have played a leading role in most of the major transactions in the oil and gas and mining, and have clearly increased our profile beyond lending in advisory and capital market mandates on the back of a sharper deployment of our balance sheet,” he concludes.
Best forfaiting house: LFC
Following on from the success of last year, London Forfaiting Company (LFC) has again succeeded in winning the GTR Leaders in Trade award for best forfaiting house.
The firm has stood resolute during the crisis, and as Simon Lay, managing director of LFC, remarks: “With the exception of the few weeks immediately following the crisis, it was business as normal for LFC.”
When some of LFC’s peers reached a standstill at the end of 2008 and beginning of 2009, LFC was well-positioned to continue to do business, having the necessary liquidity behind it to secure good deals as they came on to the market.
Lay observes: “During the last 12 months, market liquidity has been extremely scarce. I believe LFC’s biggest achievement this year has been to be able to continue to provide trade finance solutions to our clients over this turbulent period and also to remain active in the secondary market, creating liquidity and trading opportunities for our counterparties.”
LFC has clearly been one of the more active players in the trade finance and forfaiting markets, and has been of key importance in helping revive a floundering secondary market for trade finance assets.
“I believe that LFC’s managed to retain this leading position in forfaiting not only because of the consistent, professional and dedicated service we provide, but also because of our ability to finance exports to a very wide range of countries, rather than being focused only upon one geographical region,” Lay remarks.
He adds: “I am delighted that LFC has retained this award again this year. I hope that this accolade is a reflection on LFC’s long-standing commitment to forfaiting and upon our ability to provide solutions to our clients’ trade finance needs, especially during the challenging market conditions experienced during 2009.”
Best factoring house: FIMBank
FIMBank’s dedication to financing world trade has helped it win the award for best factoring house in GTR’s readers’ poll.
Despite the economic gloom, the bank has successfully managed to expand its global footprint during 2009, reaching out to new markets and clients, and easily leaping over the competition in this year’s poll.
“We believe in our business model – we apply a sharp focus which, coupled with a high degree of professional competence and determination, is fuelling our ambition to grow our factoring operations worldwide,” comments FIMBank president Margrith Lütschg-Emmenegger.
In 2009, the bank set up India Factoring in conjunction with its strategic partners Punjab National Bank, Banca IFIS and Blend Financial Services. This represents a return to India for FIMBank, having previously been a shareholder in the Indian operation Global Trade Finance (GTF), before selling its stake to State Bank of India.
FIMBank has also expanded into the Russian market this year, setting up a joint venture called FactorRus, in conjunction with Transcapitalbank and IFC.
“These are significant steps in our strategic growth,” comments Lütschg-Emmenegger.
“We aim to become significant players in both countries by providing alternative financing methods and customer-focused solutions to SMEs.”
Malta-based FIMBank is wholly focused on trade finance, providing a whole range of trade finance products and tailor-made solutions to clients across the globe.
“We are not only driven by ambition but also by our in-depth understanding of the fundamentals of trade receivables financing,” Lütschg-Emmenegger adds.
Although the bank is relatively small, it boasts a strong knowledge base and expertise. It has successfully managed to increase its presence in new markets by strategically aligning itself with key partners in these countries. As Lütschg-Emmenegger explains: “FIMBank’s strengths in this regard lie in its ability to unlock niche emerging markets by finding the right local partners in the target country.
“We provide the technical expertise and a robust technology to support the joint effort in developing factoring solutions and trade finance products suitable for the country or region.”
Best Islamic trade finance bank: ITFC
The ITFC has won the accolade of best Islamic trade finance bank, as voted by GTR readers. The ITFC is an autonomous arm of the Islamic Development Bank Group (IDB), focused on trade finance. It was created to consolidate the IDB’s various trade finance operations under one umbrella.
The International Islamic Trade Finance Corporation (ITFC) is a fairly new institution in the market since it started business in January 2008 but inherited over 30 years of pioneering commitment in Islamic trade finance and trade cooperation by the IDB (an AAA-rated multilateral financial institution). “This puts ITFC in a leadership position in fostering socio-economic development, setting new benchmarks in ethical trade financing and developing innovative shariah-compliant solutions.,” comments Waleed Al Wohaib, ITFC’s CEO.
The ITFC promotes the IDB Group’s developmental objectives by being a catalyst for the development of trade among OIC [organisation of the Islamic conference) member countries and with the rest of the world, and aspires to be the recognised provider of trade solutions for the Islamic world.
During 2009, ITFC maintained the level – and in some cases even increased – its volume of trade finance business, with trade finance approvals totaling US$2,166.37bn for 59 trade operations across three distinct regions (Middle East and North Africa, Asia and the CIS, and Sub-Saharan Africa).
“This is a laudable achievement considering the tight liquidity position on the international market and the fear of risks associated with cross-border financing which forced many financial institutions and banks to review their lending policies and downsize their activities,” comments Al Wohaib.
Financing for small and medium-sized enterprises (SMEs) and least developed member countries (LDMCs) in member countries continue to be one of the highest priorities for ITFC. As such, the ITFC concluded 18 trade operations in favour of LDMCs, amounting to US$986.90mn, which represents 46% of the total trade approvals.
Furthermore, ITFC successfully arranged 14 syndicated or co-financing trade operations amounting to US$794.4mn (representing 37% of the funding requirements of the total approvals) in favour of eight member countries.
ITFC also established a dedicated structured trade finance unit and business development division geared towards bolstering trade and increasing access to finance for member countries.
Other notable achievements include strategic partnerships with Africa Development Bank (AfDB) and the International Finance Corporation (IFC).
Best trade finance bank in Western Europe (excluding Nordic region): Deutsche Bank
For the first time, Deutsche Bank has secured the accolade of best trade finance bank in Western Europe, according to GTR readers’ votes. In doing so, Deutsche succeeds in knocking off last year’s winner RBS from the poll position.
“Our success in this area has been due to a number of factors,” remarks Daniel Schmand, head of trade finance, Emea, at Deutsche Bank.
“First, we have local knowledge and expertise. We have dedicated in-country sales and service teams in all jurisdictions that fully understand the markets they are working in.
“And second, is the global nature of our network and product offering. Wherever a client’s trading partners are located, they know that we can assist them in conducting their business as efficiently as possible,” he explains.
Indeed Deutsche Bank’s second quarter results are testament to the strength and importance of the bank’s trade finance offering, not just in Western Europe, but globally. Despite lower volumes of world trade, Deutsche’s revenues in trade finance grew year-on-year, according to the bank’s 2009 Q2 figures.
Trade finance clearly has been a priority for the bank, as Schmand remarks: “Despite the unprecedented market conditions experiences in 2009, Deutsche Bank has continued to invest in its trade finance business – in people and products, as well as in developing our capabilities in those markets most important to our clients. Indeed, we have been there for our clients throughout the crisis and downturn and this loyalty has been reciprocated.”
One key investment made by the bank in 2009 was a new financial supply chain management (FSCM) platform that draws together its capabilities in trade and cash management. The platform is fully-integrated with the payments, reporting and Swift’s trade services utility (TSU). This product was launched in response to client demand and will help better manage clients’ working capital needs.
Best trade finance bank in Eastern Europe: UniCredit
UniCredit has managed to knock last year’s winner, ING, off the top spot, taking the prize for best trade finance bank in Eastern Europe.
UniCredit is truly emerging as a market leader in Central and Eastern Europe, maintaining banking operations across a vast number of countries including Poland, Romania, Russia, Serbia, Azerbaijan, Bulgaria and Kyrgyzstan. Trade finance, supply chain management, and structured trade and export finance form part of the core offerings from the bank in these regions.
Commenting on his bank’s success, Andrew England, head of global transaction banking (CEE), remarks: “Our approach is recognised and appreciated by our clients – satisfaction surveys we run in every bank in CEE confirm this.
“We define our ability to provide processing efficiency for standard products and consultancy and tailor-made solutions for more sophisticated client needs as a key success factor.”
Markus Wohigeschaffen, head of global trade finance and services, adds: “Sometimes clients’ needs have to be met with tailor-made, highly sophisticated business solutions.
“We are able to provide even the most complex cross-country solution and enable the most financially demanding transactions. UniCredit is an undisputable market leader in CEE not only thanks to process efficiency, but even more thanks to advising, structuring and financing capabilities offered to our domestic and cross-border clients.”
Best trade finance bank in the Nordic region: SEB
SEB has successfully secured the accolade of best trade finance bank in the Nordic region for the second year in a row.
“It’s with great appreciation that we receive the title of best trade finance bank in the Nordic region in GTR’s poll. This recognition is an important milestone in our ambitions to reshape ourselves to live up to the demands expected of the next generation of trade banks,” says Patrik Zekkar, acting global head of trade finance at SEB.
According to Zekkar, a key development for the bank thus far has been to introduce a four pillar approach toward trade, namely to increase all corporate transaction business, consisting of working capital, process efficiency, risk management and customer/supplier care. This approach was initially launched using a methodology that the bank refers to as the Trade Finance Value Chain (TFVC).
“More importantly, we are now able to suggest improvements for our clients due to the launch of the Value Chain 2.0, the Corporate Financial Value Chain (CFVC).
“CFVC has enabled us to focus on the integrated effect on professional management of working capital, contemporary processes and sound and cost-efficient risk management, while working across cash, trade and supply chain services and thereby finding greater values,” Zekkar explains.
Furthermore, The Benche – SEB’s online networking site designed specifically for the trade finance community – has grown substantially in content and coverage. Among other activities streamed on the site include live trade conferences and webinars hosted by various country analysts.
“The pick-up of The Benche has exceeded all our expectations in terms of members and geographical coverage. It has attracted over 100,000 registered visitors from over 197 countries,” observes Zekkar.
Best trade finance bank in North America: JP Morgan
JP Morgan boasts that it has been “open for business” throughout 2009. Perhaps winning GTR’s award for best trade finance bank in North America is testament to this resilience in times of crisis.
It is the second year in a row that the bank has managed to secure this award. This time round there is a new face at the helm, with Daniel Cotti, former trade finance head at ABN Amro/RBS, joining the bank in mid-2009.
Commenting on the bank’s continued success, Cotti remarks: “Now more than ever, JP Morgan’s integrated solutions and expert trade teams are helping both large and small companies implement best practices for supply chain and working capital management.
“In a tough time, we bring to the North American market the strength and stability of a global bank with a fortress balance sheet, and real understanding of the challenges our clients face.”
He adds: “Our supply chain finance programmes have been a particular help to buyers and their key suppliers, providing much-needed liquidity.”
Among a number of the bank’s achievements, JP Morgan has been recognised as the largest user of US Ex-Im’s long-term programmes in 2009. It has also extended its usage of Canada’s export credit agency, EDC, programmes and continues to be the leading provider of financing for US exporters who are suppliers to the Iraq government.
Not only that, but JP Morgan is a key player in the IFC’s global trade liquidity programme, contributing US$1bn, as well as supporting the Asian Development Bank’s trade finance facilitation programme.
Best trade finance bank in Latin America (including Caribbean): BBVA
As a result of their continued and repeated success in the region, BBVA has scooped the majority of votes to win the accolade of best trade finance bank in Latin America in 2009.
In spite of all the difficulties generated by the recent financial turmoil, BBVA’s trade finance teams have demonstrated much resilience. The bank has maintained its valued customer-oriented approach – a trait which is marked by their success in the readers’ poll. “We not only have a prominent presence in the region, but a consistent one,” says Nicholas Shaw, BBVA’s managing director of structured trade finance, based in Madrid.
Shaw is quick to point out that the trade finance team’s strong position has allowed it to continue to serve the needs of its customers throughout the current difficult times, “not just in covered transactions, but across the board”.
The team’s strength is due largely to a growing global network of professionals which – according to Shaw – continue to work as a single unit providing quick, effective and efficient services to customers. “Our Asian and European operations are vital in the trade finance value chain,” he adds.
Highlighting some of the team’s achievements over the past 12 months, Shaw notes that they have been active in the ECA market as well as in pre-export finance and plain vanilla transactions. “Singling out is always difficult because there are many success stories,” he adds, and affirms that the bank’s real achievement is not in the single operations but rather the fact that they are an established force in the region, and plan to remain that way.
He concludes: “We are not an opportunist in for a quick cherry-picking exercise and then away to another round of trailblazing elsewhere. We go into those areas where we have a long-term view – this is reflected yet again through this award – and we believe that the varied and interesting pipeline of operations will continue to keep us in a leading position in the region.”
Best trade finance bank in South Asia (India, Pakistan, Bangladesh, Sri Lanka only): ICICI Bank
GTR readers have voted India’s ICICI Bank as the best trade finance bank in South Asia, for the second year in a row.
The bank’s professional and efficient approach to trade business has been widely acknowledged by our readers and the bank’s corporate clients.
Suzlon Energy, a key client of the bank comments in a statement: “This is to place on record the excellent services extended to us from ICICI Bank, commercial banking operations of Pune mega branch.
“We work in a business where projects are finalised at any moment and require execution in the shortest possible time. As a result, we are hard pressed against time to arrange documentary credit instruments being issued to our valuable clients as a bridge of trust.
“I must mention that we have always got the documents delivered to us in time even if it called for the branch staff to work late hours. Quality service brings volumes of business.”
To further improve its level of service, ICICI Bank has gone through a period of reorganisation. At the beginning of this financial year, the transaction banking group was re-structured as the commercial banking group to ensure deeper penetration and stronger client servicing capability. The bank has handpicked a team of more than 500 employees from the bank’s various segments for this new division.
With an increased focus on innovative products, online services and continuous improvements in existing products, ICICI Bank is one of the market leaders in trade finance services in India. The operation unit handled over 450,000 trade transactions in the first six months of this financial year with the help of a full-time transaction processing unit at Mumbai and a BCP (business continuity plan) site unit located at Hyderabad. The BCP unit helps mitigate operational risk by being able to back up the bank’s transaction banking processing site in Mumbai. The aim of the unit is to serve the customers continuously – even in case of a disaster. Such initiatives have helped ICICI Bank maintain a trade book that stands at US$19.3bn, way ahead of most banks in India.
Best trade finance bank in Asia Pacific: Standard Chartered
Standard Chartered came in far ahead of the competition, with GTR flooded with votes nominating the bank as the best trade finance bank in Asia Pacific. It is the second time the bank has managed to win this prestigious award.
Commenting on the achievement, Tan Kah Chye, global head of trade finance at Standard Chartered, comments: “Standard Chartered is one of the top three trade banks in the world, with a speciality in emerging markets. We are the first bank to offer buyer and supplier finance on a cross-border basis in Asia and the Middle East. Trade is in our DNA.”
The bank has been one of the strongest survivors of the crisis, and is successfully managing to capitalise on the growing intra-Asia trade flows, despite a wider collapse in global trade.
Tan comments: “Even though international trade declined by 15% to 20% in most regions around the world in 2009, Standard Chartered supported trade flows that were just as high as a year earlier. The comparison is all the more striking in that 2008 was the strongest year ever for trade.”
He adds: “In particular, intra-Asia trade is growing much faster than world trade. India, which was a closed, domestic economy, has been increasing its imports dramatically in the last five years, and China today is a big consumer-driven economy.”
Tan leads the bank’s global trade finance business based out of Singapore. He is responsible for delivering overall trade and supply chain P&L, strategy and product development across the bank’s global network.
He is also a member of the Swift trade services advisory group and WTO trade expert committee.
Best trade finance bank in Australia and the Pacific: ANZ
Australia and New Zealand Banking Group Limited (ANZ) takes the honours in GTR’s inaugural award for best trade finance bank in Australia and the Pacific.
According to Mark Evans, global head of trade and supply chain at ANZ, the win is a reflection of the quality of the bank’s people, products and systems, and client confidence in ANZ’s super-regional bank strategy.
“Customers are increasingly placing importance on ANZ’s geographic coverage, which facilitates end-to-end visibility and support for our customers’ documentary and open account trade requirements,” says Evans. “We have trade and supply chain specialists on the ground in 26 countries across Asia Pacific allowing us to deliver working capital solutions irrespective of where our customers trade.”
As a leading financial services group in Australasia, and the largest Australian bank in Asia, ANZ is helping clients at both ends of the deal. The team brings local insights to global trends to help clients understand how these trends can be turned to their advantage. As ANZ has been in the region for over 40 years, clients benefit from access to the bank’s knowledge, experience and vast business connections.
While remaining focused on its existing business and opportunities throughout Australia and New Zealand, ANZ aims to become a super regional bank, growing its presence in the Asia Pacific region to around 20% of earnings by 2012.
Best trade finance bank in the Middle East & North Africa: HSBC
HSBC has succeeded in taking the prize for the best trade finance bank in the Middle East and North Africa for the second year running.
“HSBC is privileged to have earned the loyalty of, and consistent recognition from, importers and exporters across the Middle East as the leading bank for international business,” comments Kersi Patel, regional head of trade and supply chain for HSBC in the Middle East.
“I sincerely thank our clients across the region for once again recognising us as a market leader in GTR’s poll for best trade banks, and for the business they entrust to us,” he adds.
Patel believes HSBC’s strength lies in its strong understanding of local businesses and being on the ground in 13 countries across the Middle East, present in some for a number of decades.
This has resulted in the bank staying open for business across the region all through 2009 at “very competitive prices”, remarks Patel.
He goes on to expand on the range of products HSBC has to offer its Middle East and North African clients: “Our comprehensive range of solutions and advisory services are tailored specifically to support the region’s extensive use of structured trade products – which help traders overcome non-payment risk posed by current levels of corporate transparency and financial reporting in the region.”
He also highlights the bank’s “market leading operational delivery capability – allowing traders to accurately plan their trade flows, resulting in the shortest possible supply chain and thereby lower trading costs”.
Best trade finance bank in Sub-Saharan Africa: Standard Bank
GTR readers have voted Standard Bank as the best trade finance bank in Sub-Saharan Africa for the second successive year.
“Standard Bank and our various Stanbic offices around the continent are very proud of this achievement, in what proved to be very tough market conditions, and where ‘trade finance’ was on everyone’s mind, from politicians to economists, journalists, and especially our clients. This award recognises the extra effort we have made to meet our clients’ needs,” says Anne-Marie Woolley, director and head of structured trade and commodity finance (Africa) at Standard Bank in London.
According to Craig Polkinghorne, global head and director, structured trade and commodity finance at Standard Bank, a contributing factor to the bank’s success is its geographic presence across the African continent, and the linkages between Africa and its trading partners, in particular Asia, Brazil and Russia (through Troika Dialog), where the bank is also located.
“We believe that, in future, Africa will play an increasingly important role in global trade, growing trade flows with BRIC countries in particular,” says Polkinghorne. He adds that there have been increased synergies developing between the group’s trade teams located on different continents – specifically between China and Africa and Brazil and Africa.
In terms of trade products, in Africa, Standard Bank has the ability to provide a full suite of trade products, from vanilla trade to complex structures, in those countries in which they operate.
Polkinghorne notes that the bank’s “ability to add commodity hedging or physical trading to our trade finance capability links to the requirements of our commodity clients in Africa”.
The bank remained open for business throughout the financial crisis – and concluded a number of transactions in the countries in which it operates, and in all of the targeted sectors. Furthermore, the bank added a new source of funding for African trade business by introducing the Industrial and Commercial Bank of China (ICBC) – which has a 20% shareholding in Standard Bank – into some of the African transactions.
Adding to its achievements in the last year, Standard Bank was the only African bank selected by the IFC to participate as a partner bank in its global trade liquidity programme. As a result, the bank has extended a US$400mn funding line specifically earmarked for trade finance transactions in Africa.
“We look forward to 2010 with enthusiasm, and optimism that we will be able to develop the business further, and support more African clients in their trade activities,” says Polkinghorne.
Best trade finance bank in West Africa: FBN Bank
Making the most of the tumultuous conditions and securing the top spot as best trade finance bank in West Africa is FBN Bank.
FBN entered the market at a time when many other banks were pulling back facilities and withdrawing from the region, and the bank quickly established a reputable name for itself – not least of all amongst some of the biggest traders around.
John Vowell, FBN’s director of structured trade commodity finance attributes this status to the bank’s “ability, agility and speedy responses”.
Vowell explains that FBN meets the requirements of today’s traders in that it provides them with a certain amount of certainty. “They no longer require you to be an AA-rated bank, they want somebody who is going to perform and deliver. And we as FBN are able to do that. We’ve illustrated that around the soft commodities space and the oil business as well.”
FBN has grown dramatically from its modest start in early 2009, and now boasts a large and ever-growing portfolio of businesses across the spectrum. “In the last year, we’ve had companies welcome us with open arms and receive us into their banking group,” says Vowell.
Moreover, Vowell’s team has exceeded all of the targets and goals that they set for themselves when planning their initial Africa strategy. As such, the next year looks set to be very interesting. “I think 2010 will be a year where FBN becomes a common name around some of the bigger transactions in Africa – and also some of the bigger traders,” Vowell explains.
As such, Vowell predicts that the bank will be a big player in the commodities space, especially focused in the sugar, cocoa, coffee, wheat, maize and tobacco markets.
He adds that the bank is expanding its existing bilateral facilities, and in terms of future syndicated loans and annual structured trade and commodity finance deals, Vowell believes that FBN will take a more active role in participating in these facilities.
Best trade finance boutique institution: Falcon Trade
Few people in trade finance will have failed to notice the rise of Falcon Trade Corporation in recent years. Having started in the Middle East – and retaining their head office in Dubai – they have opened their latest offices in the Americas after previous openings in Singapore, Malaysia and Indonesia.
“Our focus is on making the seemingly undoable doable,” says CEO Will Nagle, who presides over a rapidly expanding team in London’s iconic ‘Gherkin’ tower. “We look for opportunity in difficult markets or difficult situations where our innovative structuring skills can add most value. And, believe me, there have been a lot more of those lately – not just in emerging markets.”
Indeed, the parent company, Falcon Group is expanding to take in assets that are not directly trade-related.
“Trade finance is a very innovative market,” says Nagle. “And some of the products and techniques can be applied elsewhere – especially in periods where credit risk is increasing.”
Yet trade services remain at the core of Falcon, which is unlikely to forget its roots anytime soon – especially given the recent results.
“We have the ambition of achieving turnover of US$5bn in the next three years,” says chairman Kamel Alzarka, who founded the company in 1996 when still in his twenties. “And having recorded a 67% increase in turnover to US$1.3bn in financial year 2008 from US$790mn in 2007 we remain on course. We are also very profitable – with the group’s net profits increasing by 342% to US$24mn in 2008.”
Certainly, Falcon appears to be scaling up at a rapid pace. “It is heady stuff,” says Nagle. “But in a rapidly changing market it is those that adapt that survive and prosper.”
With Falcon making such a rapid name for itself in trade services and beyond, the most pertinent question may be for how much longer it can call itself a “boutique”.
“We like the tag because it suggests speed, innovation, service, freshness and – these days – freedom,” says Alzarka. “But, in terms of scale, our ambitions go way beyond being a boutique.”
Best trade outsourcing bank: BNY Mellon
BNY Mellon has secured the top spot as best trade bank for outsourcing, as voted by GTR readers.
As a result of its unique offering, BNY Mellon has shown remarkable growth in just a few years.
“A key reason we have gained such traction in the market – in a reasonably short timeframe – is our non-compete approach to outsourcing,” says David Cruikshank, executive vice-president of treasury services at BNY Mellon. “We have heard the same thing in the Americas, Europe, the Middle East and Asia. Regional banks are uncomfortable outsourcing to global banks that also compete for their corporate business. It is a big issue. We don’t compete, and that, in our opinion, has made all the difference to a surprising number of our clients and potential clients.”
BNY Mellon has achieved phenomenal success as an insourcer of trade services, especially since having reinvigorated their efforts into Emea and Asia.
“Being a specialist insourcer means that we develop individual solutions for our clients,” says Alan Verschoyle-King, managing director, head of treasury services, EMEA. “They are not logging on to a proprietary system developed to suit the global bank. We offer a partnership approach – meaning that the solution is bespoke and the customer service element highly geared to their needs.”
But the bank is not relying on its past achievements. In the last year it has enhanced its offering, by – for instance – developing a multi-currency trading capacity.
“A few years ago we were perceived as very American,” says Cruikshank. “Now we are viewed as a global player. We have had big wins this year in Europe, the Middle East, Africa, Asia and Latin America. This has mainly been down to our partnership approach, but we have also benefited from the global situation. Some of the bigger players in this market became a credit risk in a very short space of time, meaning some banks wanted to collaborate with providers that had no solvency issues. But we expect our pace of growth to continue in 2010, so there is a lot more going on here than just a flight to quality.”
Best trade credit and political risk insurance broker: BPL Global
One of the London market’s most experienced political risk brokers, BPL Global, has been awarded the top spot in this category.
Commenting on the win, BPL Global’s chairman, Charles Berry, notes that the group would be especially pleased if readers – when they voted – had in mind BPL Global’s claims service.
“The efficient and timely handling of claims ranks very high on our list of services to clients. In a testing year for the political risk insurance (PRI) market, we are pleased that, by and large, the market has been handling and paying claims very well,” Berry says.
BPL Global reached a landmark in 2009 in that the aggregate of all claims collected by the broker for their clients on BPL policies since the company was set up in 1983 now exceeds US$1bn.
Berry explains that for the PRI market, this is a large number. As a point of reference, he mentions that the US government’s Opic– established in 1971 and with a more illustrious name in the PRI market – has yet to pass this landmark.
Yet, he adds, in terms of the wider insurance market, US$1bn of claims in over 25 years is not a large number and confirms that the PRI market, while now well established, remains comparatively small. “The PRI market should grow and our aim is to help it grow successfully,” he adds.
“Our clients do not want to have claims. But when claims arise, as they inevitably do, clients want them settled with the least possible fuss. I have been confident for some time that our non-payment insurance polices (about 80% of our business) are very clean and clear, and perform well in practice. Recent experience bears this out.”
“I would also defend our record over the years with ‘pure’ PRI claims – expropriation, political violence, etc. After all some of our largest claim settlements have been in this area.”
Berry also acknowledges the need for the market to continue to improve its investment insurance and pure PRI policies. “This remains a priority of ours for 2010 and beyond.”
Best trade credit insurance underwriter: Chartis
Chartis has succeeded in being the first to win GTR’s new annual award for best trade credit insurance underwriter. It is the first year GTR has included categories for insurers.
Neil Ross, senior vice-president, trade credit at Chartis UK, comments: “It’s very pleasing to be recognised as the best trade credit insurance underwriter, particularly as it was a reader’s poll, which suggests that we are delivering what our customers want; greater credit limit certainty and a consistent underwriting approach.”
One of the biggest developments in 2009 for the insurer was its rebranding from AIG to Chartis. This move in mid-2009 saw all of AIG’s global property casualty business rebranded as Chartis, including its trade credit division.
Following the rebranding, Chartis has continued to provide a reliable service to its clients, as Ross observes: “Within this challenging risk environment, working in partnership with our policyholders has been key.”
The firm has also pioneered new products and tools aimed to make their services even more efficient, one such innovation being its new global limits manager product.
“Customers are providing excellent feedback on global limits manager, our innovative credit management tool, which provides greater control and visibility over trade receivable risks,” comments Ross.
“This in turn has enabled our dedicated underwriting team to develop new products to support captive solutions and trade finance. All of which has helped us to grow our business at a time when the credit insurance market has been significantly challenged.”
Best political risk insurance underwriter: ACE Global Markets
Winning the award for best political risk insurer as voted by GTR readers is ACE Global Markets, which has shown considerable leadership during what has been a difficult 12 months for the market.
Julian Edwards, ACE Global Markets’ head of political risk and credit, says that this recognition comes from combining some of the company’s key assets. These include the experience and depth of knowledge of its underwriting and risk management team, its consistent approach to underwriting, as well as the global reach of the company’s operations.
“We also seek to provide positive leadership in the marketplace and a robust, secure balance sheet – thus giving our clients peace of mind,” Edwards explains.
ACE Global Markets is part of the Ace Group of Companies – the reputable global insurer – and Edwards adds that a true benefit has been that they work within a company that really understands country and credit risk.
Edwards lists ACE Global Markets’ biggest achievement as the company’s ability to offer its clients and brokers a stable and financially secure risk platform despite the global economic situation.
“We have retained our capacity and commitment to support our clients, manage claims quickly and efficiently, and respond to their needs through turbulent times,” he concludes.
Best development bank in trade: EBRD
The European Bank for Reconstruction and Development (EBRD) has lived up to its reputation as the best development bank in trade, having secured the majority of votes in this category.
The EBRD’s Trade Facilitation Programme (TFP), launched in 1999, has been key to their global success. In order to compensate for the lack of available trade limits from the commercial market, this year alone more than 800 foreign trade transactions have been supported by the EBRD’s TFP programme, thus providing additional benefits to the trade finance market.
The bank is still playing an important role in promoting cooperation between the regional trade programmes and co-financing with other development agencies, commercial banks, insurance underwriters and investment funds.
At the same time, the EBRD continues to develop and test innovative additions to its programme and to share its experience with other development agencies.
Rudolf Putz, who heads up the EBRD’s TFP, lists as an example the TFP cash facilities which can be combined with TFP guarantee facilities.
He explains: “During the recent liquidity crisis many foreign commercial banks found it difficult to provide banks in emerging markets with sufficient liquidity. As a result, the EBRD offered not only up to 100% risk cover for letters of credit issued by TFP client banks in Eastern Europe and the CIS, but provided the issuing banks also with the necessary liquidity for pre-export finance, post-import finance and financing of local distribution of imported goods.”
Putz adds that while other major trade liquidity and co-financing programmes supported mostly large international banking groups, the EBRD’s TFP continued to also fund smaller banks in early transition countries.
“Based on the EBRD’s positive experience, other development banks like the ADB and IADB are now offering similar facilities to banks in their countries of operation,” Putz notes.
He highlights the bank’s ongoing support of Eastern Europe and the CIS as one of its biggest achievements in the past year.
“As a result of on-going negotiations concerning the restructuring of trade finance debt in Kazakhstan and Ukraine, most foreign commercial banks, insurance underwriters and export credit agencies suspended their trade finance facilities for borrowers in Eastern Europe and the CIS.
“In many cases the EBRD was the only institution which could still provide risk cover and liquidity for financing foreign trade with importers and exporters in this area.”
Best export credit agency: EKN
Claiming the title of best export credit agency (ECA) as voted by GTR readers is Sweden’s EKN. The award recognises the ECA’s aptitude for development and change in response to a growing market and the shifting needs of its exporters.
There was a significant increase in demand for EKN guarantees during 2009, says Karin Apelman, EKN’s director general. “In the first six months of 2009, we offered the exporters a nine-fold increase in guarantees – from €2bn to €20bn – compared to the same period last year.”
The Swedish government reacted quickly to the effects of the financial crisis, and doubled EKN’s statutory limit from January 1, 2009.
“The budget proposal for 2010 asks for a new increase,” says Apelman. “We have yet never to say no to sound business because of limit restrictions.”
In addition to an increased number of transactions, EKN has also been responding to the changing needs of its exporters. As such, due to a lack of working capital, the ECA began opening up working capital guarantees for large corporates.
“We have been offering a working capital guarantee for SMEs for some years now, and now offer a temporary application of the guarantee for large companies,” explains Apelman. “We have offered 27 large Swedish exporting companies working capital guarantees for approximately €7.5bn.”
The director general describes EKN as a “market-oriented organisation” and says that their team has an “open mind” to discussing new business.
“We offer our customers a high service level, and have a very close relationship with many of our customers – both large and small companies.
“Since we work almost exclusively with single risk transactions – with a couple of exceptions – we cooperate very closely with exporting companies and the banks financing their contracts. We often travel together with our customers to meet their clients,” says Apelman. “Meeting the people in their own country helps us understand the risk, as opposed to just analysing financial statements.”
