Winners Profile | Best Trade Finance Providers 2016

Citi’s Treasury and Trade Solutions (TTS) franchise provides integrated cash management and trade finance services to multinational corporations worldwide. It is distinguished by its massive global footprint. The bank does business in 160 countries (with experts on the ground in 96 of them) and 140 currencies.

Citi is one of the first global banks to offer its corporate clients in Latin America host-to-host automated solutions. In North America, offerings range from simple trade finance loans to complex distribution financing structures. In Africa, crucial relationships with export credit agencies and multilateral agencies allow Citi to meet its customers’ capital spending needs and to customize supplier financing. And its cross-border trade hub in Singapore supports regional trade flows in Asia-Pacific, where Citi is the largest US-based bank in terms of commercial letters of credit outstanding. Citi has implemented the MT798 corporate-to-bank SWIFT messaging protocol, which lets clients submit document images to Citi securely. The bank’s online open-account portal automates the process of matching purchase orders with invoices. Citi is expanding its role as a white-label provider of both back-office and client-facing trade solutions.

The European Bank for Reconstruction and Development (EBRD), which promotes foreign trade in the countries where it operates, launched Its Trade Facilitation Program in 1999 and more than 120 issuing banks in 25 countries currently participate in the program, working with more than 800 confirming banks around the world. The TFP provides cover for a broad range of trade finance instruments and can be used to guarantee against political and commercial payment risk. The TFP provides short-term loans to banks and factoring companies for lending to local exporters and importers, and it offers trade-finance training and advisory services to local banks.

The Asian Development Bank, based in Manila, aims to plug widening gaps in trade finance among the region’s emerging economies. That’s an increasingly important role as commercial banks are withdrawing from the more challenging markets, where complying with new regulations to fight money laundering and terrorism adds cost and complexity, the ADB says. Backed by the ADB’s triple-A credit ratings, the program works with more than 200 banks, including 61 issuing banks, providing guarantees and loans in markets that need them most.

Amsterdam-based ABN Amro’s global commodity finance operations provide financial structures, including inventory financing, for companies involved in the production, transport, trade, processing and distribution of commodities, with a focus on agricultural commodities, metals and energy. The bank has been building up its financing of commodity flows at a time when other banks have left the business. It has a Hong Kong commodities desk and a regional structured inventory product desk in Singapore, and is in the process of converting its representative office in Shanghai into a full branch. The Netherlands is China’s second-largest trading partner in the European Union. ABN Amro also has offices in Sydney and Tokyo that provide trade services. The bank’s overall international network covers 23 countries and territories.

HSBC offers a range of electronic trade products and solutions to speed up the trade cycle, improve accuracy and reduce operating costs. Its Document Tracker lets customers check the delivery status of their export documents and track shipments via the HSBC website. DocumentExpress automates the process of preparing export documentation. With some 5,800 specialists in 56 countries, HSBC offers more than 100 products and services that can be combined into a customized solution for managing trade risks, processing trade transactions and financing trade.

Paris-based Euler Hermes, the world’s leading provider of trade credit insurance, is a subsidiary of Germany’s Allianz group. Its trade products insure companies against accounts-receivable losses caused by credit risks like foreign buyers’ insolvency or bankruptcy. Euler Hermes has a network of risk experts in more than 50 countries. Its proprietary online information service, Eolis, connects to a global risk platform with data on more than 40 million companies. Euler Hermes, which actively monitors all insured accounts and assigns them specific credit limits, says that on average, 40% of a company’s assets are in the form of trade debts.

With an on-the-ground presence in more than 50 countries and 5,000 correspondent banking relationships, Commerzbank settles more than $100 billion of trade transactions annually. Commerzbank finances 30% of the foreign trade of Germany, its home market. It is the most active bank for German export letters of credit, according to SWIFT data. Commerzbank is the leading trade bank for German SMEs, and it provides complex project finance cover for large machinery exporters. For the past 11 years, Commerzbank has been the most active confirming bank for the EBRD’s trade facilitation program (see Best Trade Finance Program, above). In Central and Eastern Europe, Commerzbank is expanding its export finance expertise in the Austrian and Czech SME sectors, and it is the only foreign bank with a representative office in Minsk, Belarus. Through its subsidiary mBank, it is a major trade finance provider in Poland. A founding partner of the African Development Bank’s trade facilitation program, Commerzbank is also is one of the few international banks with a network across Africa. Exporters must increasingly supply financing up front, so Commerzbank offers tailored liquidity solutions through forfaiting options and individually structured trade finance.

Commodity firms in emerging markets have long used structured trade finance, where loans are repaid out of revenues from international sales. Now other industries are taking advantage of these solutions. Citi creates alternative financing structures tailored to each company that aid in liquidity and working capital management and can lower risks by improving relationships with suppliers. Citi’s commodity trade finance is managed as a global business, enabling the bank to finance interregional commodity flows and connect existing Citi clients that are active in the supply chain. Citi’s export and agency finance advisers use guarantees issued by export credit agencies to purchase exporters’ receivables. The bank has more than 60 experts in 15 locations worldwide. ECA financing enhances exporters’ risk capacity, enabling them to expand into higher-risk markets.

With a global network of over 100 trade centers in 60 countries, BNP Paribas provides trade finance solutions in many emerging markets at a time when other banks are cutting back. It has added operations in Africa and acquired Bank BGZ in Poland last year. It is now is the leading provider of trade finance to Poland’s farmers, expanding its trade centers in the country to four from one. Its Turkish subsidiary, Türk Ekonomi Bankasi, is a top-three bank in export financing volume. And BMCI in Morocco was the first bank to provide structured trade finance products in that country.

Standard Chartered has maintained a presence in challenging countries like Iraq and Pakistan while other foreign banks have pulled out. The bank is present in 15 African countries and its alliance network covers 37 countries in sub-Saharan Africa. In such frontier markets as Botswana, Ghana and Kenya, Standard Chartered has supported eco-friendly projects using tailored, structured trade and working capital solutions. The bank is also active in Bangladesh, Pakistan, Sri Lanka and Vietnam.

Standard Chartered is a leading provider of working capital solutions, offering preshipment finance facilities to its corporate customers’ suppliers. The finance is directly linked to the anchor client and based in large part on the strength of the client-supplier relationship. Under its buyer finance program, Standard Chartered provides financing to dealers and distributers to ensure access to working capital for them to purchase the anchor client’s products. The bank also offers Islamic, shariah-compliant versions of these programs.

As the leading agricultural lender in the US, Wells Fargo combines its agribusiness expertise with a growing international presence to help US companies supply food and fiber globally. It supports companies in all areas of the energy business. International trade finance is one of the bank’s core strengths, with Hong Kong the hub for Wells Fargo’s trade-processing sites around the world. (The bank processes 10% of all letters of credit going through Hong Kong.) Its proximity to US clients’ vendors and Asian sourcing offices enables Wells Fargo to help US companies build strong trading relationships. Wells Fargo has more than 4,000 correspondent banks in 125 countries. It is the leading trade-outsourcing bank in the world and the largest originator of SWIFT trade messages in North America. For customers sourcing on open-account terms, Wells Fargo provides financing opportunities through its trade payables finance program. It also hosts the infrastructure for a Cloud-based global workflow engine.

BNP Paribas is the leading trade finance bank in Western Europe, with a market share of 36%, according to a 2015 Greenwich Associates study. The bank, known for competitive pricing and strong service, has a global network of more than 100 trade centers and 300 specialists in over 60 countries. Business Planet, BNP Paribas’s electronic banking tool for corporations to handle trade finance products like letters of credit and guarantees, shortens the processing time for orders and helps eliminate potential preparation errors. BNP Paribas offers integrated banking solutions with a single point of contact in Europe. BNP Paribas’s online Atlas provides information on cash management and trade finance requirements in 60 countries worldwide.

Nordea, the largest financial services group in the Nordic region, is also the leading trade finance bank, with a market share of about 33% in Denmark, Finland, Norway and Sweden. Nordea uses a global operating model throughout its trade finance business that ensures a consistently high level of service across the network.Nordea is introducing a new online system, Trade Finance Global, to handle documentary collections, guarantees and standby letters of credit for importers and exporters. The system gives corporations a complete overview of all of their trade finance transactions globally. Automated processing supports quick and accurate transaction handling. Stockholm-based Nordea is part of international partnership, Distributed Ledger Group, comprising 25 leading international banks. Headed by financial innovator R3, the group aims to explore the use of blockchain technology in financial services.

Milan-based UniCredit is the largest international banking group in the CEE region with a network of 3,600 branches in 14 countries. Its export market share in the region is over 25%. The bank also has one of the largest European networks with more than 7,900 branches in 50 countries. UniCredit Bank Austria is the entry point for UniCredit’s 4,000 correspondent banks around the world, using the SWIFT message structure. The bank is a leader in the adoption of the bank payment obligation, where it is conducting its first tests with selected clients. UniCredit focuses on electronic banking solutions to meet the trade finance needs of large corporates as well as SMEs. Its trade finance portal enables companies to handle guarantees and letters of credit with all of their global banking partners through a single platform. UniCredit offers an umbrella agreement for guarantees, which reduces the time spent on negotiating the documentation for guarantee lines.

With nearly 14,000 branches, Santander boasts the largest international network of any bank. It has Latin America’s biggest franchise, with local banks in Brazil, Mexico, Chile, Argentina, Peru and Uruguay. The bank’s online trade portal, 10,000 pages covering 185 countries, helps companies identify markets for their products. Banco Santander Rio, Argentina’s largest private bank, joined the International Finance Corporation’s Global Trade Finance Program in November, 2015, which will help it strengthen relationships with banks in countries that want to trade with Argentina. In October, 2015, Santander signed an agreement with the International Chamber of Commerce to launch the ICC Academy, a training program in trade finance and international business and investment. The program will offer 70 online courses and two global certificates—the Global Trade Certificate and the Certified Trade Finance Professional.

Scotiabank has been part of the Caribbean banking scene since 1889, when it opened its first office in Kingston, Jamaica, to support international trade in rum, sugar and fish. Scotiabank now operates in 25 countries in the Caribbean and Central America. With more than 200 branches throughout the region, Scotiabank offers both retail and corporate banking services. Its Caribbean mobile app provides access to a client’s Scotiabank accounts in 20 countries throughout the Caribbean. TradeExpress, the bank’s online international trade service for importers and exporters, provides access to finance, as well as comprehensive online reporting. Scotiabank offers software that makes it easier for exporters to prepare shipping documents to support letters of credit, documentary collection or open-account transactions.

HSBC sits on both sides of the world’s top 15 trade corridors and has focused on capturing expected future growth in Asia, including in China’s Pearl River Delta and the Association of Southeast Asian Nations. It is the largest foreign bank in China and the market leader in renminbi services. In October, 2015, HSBC and the Industrial and Commercial Bank of China arranged a $4.7 billion, renminbi-denominated bond sale in London for the People’s Bank of China, the central bank’s first debt offering outside China. A team of specialists in HSBC’s Hong Kong office handles the bank’s supply chain finance service in the region.

Amman, Jordan-based Arab Bank, with 600 branches in 30 countries, has an extensive network in the Middle East and North Africa and has made trade finance an integral part of the bank’s global business development strategy. Its online trade finance and cash management system helps corporates conduct international trade transactions efficiently. Arab Bank maintains close relationships with its customers and tailors solutions to meet their trade finance needs. It is a leading financial services provider for local importers and exporters, and also serves multinational companies. Arab Bank has been operating in the region for 85 years and has a well-established network that is strategically located to sync with regional trade flows.

Johannesburg-based Standard Bank’s corporate and investment banking division has led the bank’s international expansion in 20 countries in Africa. Standard Bank maintains extensive trade lines with African and global financial institutions to support trade flows between Africa and the rest of the world. Its strengths are in commodities, telecom, food, manufactured goods and capital goods imports into Africa. Its niche focus on financial institutions and correspondent banking requirements gives it a client base representing a major share of the cash payments flowing into South Africa.