World’s Best Trade Finance Providers 2017

Regulatory compliance costs contribute to a growing global shortage of trade finance, particularly in emerging markets.

Bankers are worried about the ability of the financial system to deliver the financing needed to help restore international trade as a driver of economic growth. Partly due to the cost and complexity of compliance requirements of anti-money-laundering and know-your-customer rules, there is a worsening global shortage of trade finance, according to the Paris-based International Chamber of Commerce (ICC).

The shortage is hitting hardest at small and midsize enterprises, particularly those in emerging markets. At a time when African economies and businesses are increasingly engaging in international trade, and intra-African trade shows signs of significant growth, the lack of trade finance is a major obstacle.

Africa has a trade finance shortage of perhaps as much as $120 billion, according to the ICC. This is far higher than its previous estimate of $25 billion. The group’s latest annual survey in 2016 found a decrease in the use of traditional trade finance instruments and an increase in supply-chain finance deals.

“We must emphasize the importance of trade finance,” says John Danilovich, ICC secretary general. “It is often forgotten—trade finance has dropped off the international agenda. We need to do more to communicate its central importance to the global economy.”

According to the ICC’s 2016 trade finance survey, 90% of the 357 banks in 109 countries that responded said compliance requirements are barriers to the provision of trade finance. That was up from 81% in the previous survey.

Some 40% of respondents said they had terminated banking relationships as a result of compliance requirements. Other impediments to trade noted by respondents included low credit ratings of banks, as well as of countries and companies.

From the companies’ perspective, the commoditization of trade finance has reduced differences between providers, according to Greenwich Associates. Companies can easily shop among providers for the best price.

In its recent survey of Asian trade finance, the firm says the region remains a buyer’s market—for now. Japanese banks, regional Asian banks and local country providers are competing for new corporate relationships by aggressive pricing.

“Global banks will be auditing relationships on a case-by-case basis, assessing both the return on capital as well as the linkage between lending and other parts of the wallet served,” says Paul Tan, managing director at Greenwich Associates. Global banks are focusing on key clients: large corporations whose needs go beyond plain vanilla letters of credit and into functions like supply-chain management and working-capital management that are more complex, sticky and profitable.

Any retrenchment on the part of global banks has not yet been enough to offset the continued influx of capital into the trade finance business from banks eager to get their feet in the door with large Asian companies, Tan says. Some banks also are looking to capitalize on the pullback of their global competitors and are keeping prices low, at least for now, says Greenwich Associates vice president Gaurav Arora.

Global Finance editors, with input from industry analysts, corporate executives and technology experts, selected the best trade finance banks in 83 countries and nine regions. In addition, we selected the best bank for trade finance globally as well as the best banks in various service categories, such as document management and export finance. We polled our corporate readership to increase the accuracy and reliability of the results.

Criteria for choosing the winners included trade-related transaction volume; scope of global coverage; customer service; competitive pricing; risk management and innovative products, services and technology. The winners are those banks that best serve the specialized needs of corporations as they engage in cross-border trade.

Best Trade Finance Providers 2017

GLOBAL WINNERS
Best Bank for Trade Finance	BNP Paribas
Best Multilateral Institution for Trade Finance	EBRD
Best Bank for Commodity Finance	Rabobank
Best Trade Document Management	Bank of America Merrill Lynch
Best Trade Credit Insurance Provider	Coface
Best Bank for Export Finance	Commerzbank
Best Bank for Structured Trade Finance	ANZ
Best Bank for Trade Finance in Emerging Markets	Societe Generale
Best Bank for Trade Finance in Frontier Markets	Standard Chartered Bank

 

REGIONAL WINNERS
North America	Citi
Latin America	Santander
Caribbean	Scotiabank
Western Europe	Societe Generale
Nordic Region	Nordea
Central & Eastern Europe	UniCredit
Middle East	Arab Bank
Asia-Pacific	DBS Bank
Africa	Standard Bank

Country Winners
Algeria	Societe Generale Algerie
Angola	Standard Bank Angola
Argentina	Banco Santander Rio
Armenia	AraratBank
Australia	ANZ
Austria	UniCredit Bank Austria
Azerbaijan	Muganbank
Bahrain	Ahli United Bank
Bangladesh	Standard Chartered Bank
Belgium	KBC
Brazil	Itaú BBA
Bulgaria	UniCredit Bulbank
Cambodia	ABA Bank
Canada	Royal Bank of Canada
Chile	Banco Santander Chile
China	Bank of China
Colombia	Banco de Bogotá
Croatia	Zagrebaka banka
Cyprus	Bank of Cyprus
Czech Republic	SOB
Denmark	Danske Bank
Egypt	Commercial International Bank
Estonia	Nordea
Finland	Nordea
France	Societe Generale
Georgia	Bank of Georgia
Germany	Commerzbank
Ghana	Zenith Bank
Greece	National Bank of Greece
Hong Kong	HSBC
Hungary	K&H Bank
India	State Bank of India
Indonesia	CIMB Bank
Israel	Bank Leumi
Italy	Intesa Sanpaolo
Japan	Bank of Tokyo-Mitsubishi UFJ
Jordan	Arab Bank
Kazakhstan	Eurasian Bank
Kenya	CfC Stanbic Bank
Kuwait	National Bank of Kuwait
Latvia	Swedbank
Lebanon	BankMed
Lithuania	Swedbank
Luxembourg	ING Luxembourg
Malaysia	Maybank
Malta	Bank of Valletta
Mauritius	Mauritius Commercial Bank
Mexico	Banco Santander
Mongolia	Trade and Development Bank of Mongolia
Morocco	Attijariwafa Bank
Mozambique	Millennium bim
Netherlands	ING
New Zealand	ANZ
Nigeria	First Bank of Nigeria
Norway	DNB Bank
Oman	BankMuscat
Pakistan	Habib Bank
Palestine	Bank of Palestine
Panama	Bladex
Philippines	BDO Unibank
Poland	mBank
Portugal	Banco Santander Totta
Qatar	Doha Bank
Romania	BRD-Groupe Societe Generale
Russia	VTB Bank
Saudi Arabia	SABB
Singapore	DBS Bank
Slovakia	SOB
South Africa	Standard Bank
South Korea	KEB Hana
Spain	BBVA
Sweden	Handelsbanken
Switzerland	Credit Suisse
Taiwan	CTBC Bank
Thailand	Kasikornbank
Turkey	Garanti Bank
Ukraine	Raiffeisen Bank Aval
United Arab Emirates	Abu Dhabi Commercial Bank
United Kingdom	HSBC
United States	Bank of America Merrill Lynch
Uzbekistan	Asia Alliance Bank
Venezuela	Banco Mercantil
Vietnam	Techcombank

With a global network of more than 100 trade centers in 60 of the 74 countries where it operates, BNP Paribas provides a wide range of trade finance solutions, including structured finance and customized supply-chain management, as well as Web-based platforms. The bank works with more than 40,000 corporations across all industries worldwide and handles more than 14 million trade transactions a year. BNP Paribas offers databases and services to help corporate clients prospect internationally for trade partners. The bank has initiated a groupwide drive to digitize all of its activities and has been investigating the use of blockchain technology and distributed ledgers since 2011.

The EBRD’s Trade Facilitation Program (TFP) includes more than 100 issuing banks in 23 countries in Central and Eastern Europe, the Commonwealth of Independent States, and the Southern and Eastern Mediterranean. The issuing banks work with more than 800 confirming banks worldwide. 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 also provides short-term loans to banks and factoring companies for lending to local exporters and importers. The countries where it has been most active recently include Ukraine, Armenia, Cyprus, Belarus and Serbia, according to the EBRD.

Utrecht, Netherlands-based Rabobank has offices worldwide staffed with experts in trade and commodities. The bank has long been active in financing global trade in agricultural commodities, energy and metals. Rabobank offers specialized products at every stage of the trade flow. The bank confirms and discounts large volumes of export letters of credit. It also provides ownership-based financing solutions, as an alternative to regular financing, through its structured inventory products.

Trade finance historically has been a paper-intensive business. BofA Merrill Lynch’s CashPro Trade platform streamlines the process of document identification and retrieval through the use of innovative data-capture technology. The bank created the document images module based on direct input from numerous trade clients. Using intelligent character recognition and optical character recognition (ICR/OCR) technology, the application recognizes metadata (such as invoice numbers and transaction amounts) during a document search. The bank says the tool simplifies trade document processing and compliance checking.

Resolving the problem of unpaid invoices is no small matter in international trade. Coface, a subsidiary of French bank Natixis, offers trade credit insurance in more than 200 countries. It has experienced emerging market losses recently, mainly in Latin America and Asia, but has adopted stricter underwriting guidelines and is focusing more on profitability than on growth. Coface offers many options to cover various types of risk, including nonpayment due to a war or currency transfer restriction, and manufacturing costs when the buyer becomes insolvent before the goods are delivered. Coface’s client retention rate remains strong, at about 90%.

About 20% of the eurozone’s exports go through Commerzbank, the most active bank for processing German export letters of credit. For the 12th straight year, in 2016, Commerzbank confirmed more letters of credit and guarantees for the EBRD’s Trade Facilitation Programme than did any other bank. More than 100 issuing banks in 19 countries have used Commerzbank as a confirming bank under the TFP. With a presence in more than 50 countries, and 5,000 correspondent-banking relationships, Commerzbank settles more than $100 billion of trade transactions annually. It is the leading trade bank for German small and medium enterprises, and it also provides complex project finance cover for large machinery exporters.

ANZ offers a broad array of structured trade and commodity finance products. Its specialized team of structured trade bankers focuses mainly on financing cross-border commodity flows in order to enhance the credit rating of the facility beyond that of the borrower. Each arrangement is tailored to the specific needs of the client. Products include warehouse financing, pre-export finance and reserve-based lending. ANZ also offers borrowing-base financing, whereby working-capital financing is structured on a client’s inventory and receivables.

Societe Generale offers strong trade expertise in more than 50 countries, including 18 in Africa and 15 in Central and Eastern Europe. In North Africa, the bank has a high penetration rate in trade finance in Tunisia, Morocco and Algeria. It says it is the leading bank in Cameroon and Cote d’Ivoire, and number two in Senegal. In CEE, Societe Generale claims to be the third-largest bank in the Czech Republic, number two in Romania, and the second-largest private bank in Russia (Rosbank). It has a close working relationship with the Russian Export Insurance Agency.

Standard Chartered is a leading global trade finance bank, processing $100 billion of exports annually, including letters of credit, documentary collections and invoice financing. The UK-based bank has a direct presence in 15 African countries. Through its alliance network, it provides coverage to an additional 23 countries in sub-Saharan Africa. Standard Chartered is the first foreign-owned bank with an on-the-ground presence in Iraq. It offers a strong portfolio of Islamic banking products in the Middle East region.

 

Citi offers the most comprehensive trade platform in North America, with full mobile capabilities. Citi’s global network and its Treasury and Trade Solutions franchise enable it to service end-to-end, cross-border trade flows with integrated cash management and trade finance services. Citi has long-standing relationships with export credit agencies and regional processing centers around the world. The bank also offers “white label” solutions and trade services to financial institutions. Its understanding of local legal and regulatory requirements, trade practices and risks make it an invaluable partner for regional firms entering new markets.

Santander has a large franchise in Latin America, with local banks in Brazil, Mexico, Chile, Argentina, Peru and Uruguay. Santander is the largest international bank in Brazil, where it has a 16% market share in trade finance. Banco Santander Chile is the leading trade bank in that country, and Banco Santander Rio is the largest privately owned bank in Argentina. Santander’s online trade portal helps companies identify the best markets for their products in 185 countries. Spain-based Grupo Santander is the world’s fifth-largest banking group. In addition to its global network, Santander has more than 1,900 correspondent banks worldwide.

Scotiabank is a dominant presence south of the US border with operations 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. TradeExpress, the bank’s online international trade service for importers and exporters, provides access to finance as well as comprehensive online reporting of transactions. Scotiabank software makes it easier for importers and exporters to prepare shipping documents to support letters of credit or to open account transactions.

French bank Societe Generale offers comprehensive and efficient trade services throughout Europe and beyond. Altogether, the bank has strong trade expertise in more than 50 countries, including many emerging markets. Societe Generale supports French small and medium enterprises and large corporations as they do business around the world. During 2016, the bank gained market share across all types of letters of credit in the French market. Societe Generale is able to confirm letters of credit on more than 700 banks in 100 countries. It also offers structured trade finance deals tailored to client needs.

Nordea is the leading trade finance bank in the Nordic countries, where it claims an average market share of more than 33% in Denmark, Finland, Norway and Sweden. Nordea uses a global operating model that enables it to deliver a consistently high level of trade services across its network, Trade Finance Global, for handling documentary collections, guarantees and standby letters of credit for both importers and exporters. The system gives corporations a complete overview of their trade finance transactions globally. Stockholm-based Nordea is also active in the Baltic region.

UniCredit says it is the largest international banking group in Central/Eastern Europe, with 3,600 branches in 14 CEE countries across the region. The Milan-based bank claims an export market share of more than 25%. The bank’s trade finance offerings range from traditional products and services to innovative solutions. Its Global Trade Management product suite optimizes working capital throughout a company’s global supply chain, providing advice and solutions for each component. In addition, UniCredit has a strong presence in the discounting and purchase of receivables in the CEE region. The bank has begun to implement a group-wide Web portal for its trade finance products.

Arab Bank has a network of more than 600 branches spanning five continents. Its unique positioning across the Middle East and North Africa (MENA), with local expertise in trade services, enables it to meet the specialized needs of its clients. The bank offers comprehensive corporate trade solutions, including letters of credit, guarantees, receivables financing, forfeiting and discounting. Arab Bank’s online trade finance and cash-management corporate banking solutions are available across the MENA region. The Amman, Jordan-based bank combines a historical presence in the region with the latest technology systems.

Trade finance volume at DBS Singapore rose 5% last year, outpacing the 2% rise in the local market. As a regional bank with strong connections, DBS benefits from the fact that Asian trade is continuing to drive global trade flows. The bank’s open-account trade business is growing rapidly, offsetting a decline in documentary trade. DBS is a top three bank in Asia for large corporations, which account for 82% of its trade finance portfolio. It has increased its focus on emerging markets with increasing trade flows, such as Vietnam and Bangladesh. With growing demand for renminbi financing, DBS has built up its RMB settlement capabilities to provide financing solutions. DBS India has 12 branches located at main trading centers.

South Africa–based Standard Bank has a presence in 20 countries in Africa. It maintains extensive trade lines with various African and global financial institutions to support trade flows between Africa and the rest of the world. Standard Bank focuses on key sectors, including oil and gas, power and infrastructure, mining and metals, natural resources and agriculture. The bank has a strategic partnership with the Industrial and Commercial Bank of China (ICBC), which in 2015 acquired a controlling stake in Standard Bank’s London-based global markets business.