Global trade finance loan volumes decreased for the fifth consecutive half-year period to US$50.1bn in H1 2014, a 29% drop over the past 12 months, according to Dealogic’s Global Trade Finance Review.
Global trade finance loans
This figure is down 19% from US$61.7bn in H2 2013 and down 29% from US$70.1bn in H1 2013. This was the lowest half-year volume since H1 2006 (US$42.5bn) and less than half the record high half-year volume of US$108.5bn borrowed in H2 2011.
Dealogic defines trade finance as the financing of the movement of goods and service. For the purposes of rankings, trade finance is split in its review into a number of categories, including: ECA financing, structured commodity trade finance, supply chain finance, trade flow business, and syndicated trade financing loans.
According to Dealogic, global ECA financing volumes increased 21% to US$37.2bn in H1 2014, from US$30.6bn in H2 2013. However this was still 13% less than the previous half-year’s volume of US$42.6bn and the lowest H1 total since 2011 (US$31.4bn).
ECA financing loans from Emea accounted for a 56% share of the market (US$21bn), an increase of 9% since H2 2013 and the highest half-year share since 60% in the first half of 2011.
The volume from the Americas decreased 46% to US$4.9bn in H1 2014 from US$9.1bn from the same period in 2013. It accounts for 13% of the market, which is the lowest half-year percentage share since H1 2010, which stood at 10%.
Global shipping ECA-financed loans reached US$5.8bn in H1 2014, a 71% increase on US$3.4bn from the previous year’s first half, and the highest first-half volume on record.
Citi topped the ECA financing MLA ranking with US$3.4bn in H1 2014, followed by HSBC and Sumitomo, with US$2.3bn and US$2bn respectively.
Commenting on the ranking, Sam Seghal, Emea head of trade, tells GTR: “The export and credit agency business continues to be strategic for our trade business at Citi. It complements the short-term offerings we have under our conventional products and helps our clients needing longer term funding solutions for their capital expenditure and infrastructure needs.
“As a focus, we at Citi have expanded our capabilities in the aviation and transportation sector by building competence in the shipping space. We continue to see opportunities to support infrastructure development in the power, healthcare and telecom sector in the emerging markets which we can support leveraging our network presence, client connectivity and product expertise.”
Turkey accounted for the largest share (18%) of the H1 2014 figure, encompassing all of the trade finance categories, with US$9.2bn. Australia followed with US$4.4bn and a market share of 9%, a substantial increase from the 2% share it had last year.
The largest deal to sign in the half, and the ninth-largest trade finance loan on record, was the 11-tranche US$7.7bn facility for Australian mining company Roy Hill Holdings on March 20. This was the largest deal to sign since ROS-VIT’s US$8.3bn loan on March 15, 2013.
Pre-export loans reversed a two-consecutive year-on-year decrease with US$2.7bn in the half, more than double the US$1.2bn recorded in the same period last year. It is also the highest H1 total since 2011 (US$8.1bn).