Stern Bank, an SME-focused trade bank that launched in the US earlier this year, is to set up a trade finance team in London.
The bank has hired Sunita Mehta as vice-president of financial institutions and trade, to build and lead the new team.
Mehta joins from UBL, where she was manager of financial institutions, syndicated loans and trade in the UK.
Launched in Puerto Rico in January, Stern Bank specialises in the issuance of documentary letters of credit, standby letters of credit and bank guarantees. It was founded by Peter Stern, the president of New York-based trade finance firm Express Trade Capital, and is led by Drew Cohen, previously director of the same firm, as CEO.
Speaking to GTR, Mehta says the bank will focus on emerging markets, initially on Southeast Asia and Africa, but also look at Eastern Europe and Latin America.
It serves small to medium-sized customers – companies that larger banks “usually won’t deal with because it’s not cost-efficient for them to do so”.
“Because we are small, we would prefer the smaller transactions and we’re able to take the time going through small transactions,” she explains. “One of the major hurdles for exporters and importers is the compliance cost – the large banks typically aren’t willing to go through compliance for a transaction of US$50,000 or US$100,000. It’s typically not worth it for them. Whereas we are willing to do the compliance.”
She adds that “it’s not necessarily going to be cheap – we do charge for the compliance work – but we do offer a solution”.
The London office will open early next year, and Mehta expects to hire at least four people in her team over the next 12 to 18 months.