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

 

GLOBAL WINNERS

BEST BANK FOR TRADE FINANCE

BNP Paribas

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.

BEST MULTILATERAL INSTITUTION FOR TRADE FINANCE

European Bank for Reconstruction and Development (EBRD)

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.

BEST BANK FOR COMMODITY FINANCE

Rabobank

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.

BEST TRADE-DOCUMENT MANAGEMENT

Bank of America Merrill Lynch

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.

BEST TRADE CREDIT INSURANCE PROVIDER

Coface

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%.

BEST BANK FOR EXPORT FINANCE

Commerzbank

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.

BEST BANK FOR STRUCTURED TRADE FINANCE

ANZ

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.

BEST BANK FOR TRADE FINANCE IN EMERGING MARKETS

Societe Generale

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.

BEST BANK FOR TRADE FINANCE IN FRONTIER MARKETS

Standard Chartered Bank

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.

 

REGIONAL WINNERS

 

NORTH AMERICA

Citi

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.

LATIN AMERICA

Santander

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.

CARIBBEAN

Scotiabank

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.

WESTERN EUROPE

Societe Generale

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.

NORDIC REGION

Nordea

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.

CENTRAL AND EASTERN EUROPE

UniCredit

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.

MIDDLE EAST

Arab Bank

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.

ASIA-PACIFIC

DBS Bank

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.

AFRICA

Standard Bank

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. 

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