Scores of banks are increasingly looking to relieve their balance sheets by repackaging trade finance assets through securitisations.

Despite the relatively low levels of securitisations occurring, many are predicting that the appetite from banks to offload their trade finance exposures is there, but not necessarily amongst the biggest institutions.

However, there are a number of barriers for this trend to realistically take place, such as in Asia, where there are a number of regulatory and tax considerations that are complicating banks’ efforts to find the best structures into which to package these assets, especially under the watchful eye of the regulator.

Although investors could see higher returns by engaging in this market, from a bank perspective, structuring securitisations, collateralised loan obligations and syndications, may lead to leverage and higher exposure costs.

The key problem here though is that banks need to educate investors about the intricacies of trade finance assets for real growth to realistically take place.