World’s Best Trade Finance Banks 2006

Global Finance selects the leaders in a specialized area of finance that is undergoing a jarring transformation.

Shifting global trade patterns and stronger supply chains linking the Wal-Marts of the world with their overseas suppliers are challenging trade finance banks to devise new ways of doing business. ABN Amro of the Netherlands, for example, confirmed a letter of credit in October 2005 issued by Karachi-based Metropolitan Bank for the import of canola into Pakistan. By confirming the letter of credit, the Dutch bank obligated itself to make payment to the supplier once appropriate documents were presented as evidence of delivery of the goods. This was the first transaction completed under the International Finance Corporation’s Global Trade Finance Program. The IFC provided a guarantee covering 80% of the risk involved in the transaction.

As emerging markets increase their share in world merchandise trade, banks are increasingly being asked by their customers to expand their trade finance services into new and often more-challenging countries. Guarantees provided by the IFC, the private-sector lending arm of the World Bank, are designed to encourage commercial banks to take on these added risks in a growing range of countries.

JPMorgan Chase was another one of the first banks to join the Global Trade Finance program last September. “With an already robust emerging markets business in place, we will now be able to develop our exposure in these markets even further through the trade channel established by the IFC program,” says Stacey Facter, global head of trade credit insurance for the treasury services business at the New York-based bank.

Meanwhile, trade finance banks are being challenged on another front. The volume of bank-guaranteed letters of credit is declining, and a growing share of world trade is being done on open-account terms without relying on banks as intermediaries. Under open account, a major importer with an established relationship with an overseas supplier simply agrees to pay for a shipment at a future date. The importer is not required to have its bank issue a letter of credit guaranteeing payment.

Not wanting to be squeezed out of this business, banks have responded by developing online platforms that enable their trade customers to gain the efficiencies of open-account transactions without giving up the security of payment guarantees. New programs have been developed to take information from purchase orders to create electronic letters of credit. The major trade finance banks are entering into alliances with third-party providers of logistics and transportation services. This enables importers and exporters to manage their trade and payment flows from a single online site run by their bank or by a non-bank service such as TradeCard.

Calyon, the corporate and investment banking unit of French bank Crédit Agricole, agreed last year to sell the TradeCard platform and provide customer service for the system throughout Europe. Calyon will use its global network to sell both TradeCard and its own financial services to export customers.

In our sixth annual survey of the World’s Best Trade Finance Banks, Global Finance editors, with input from industry analysts, corporate executives and technology experts, chose the leading trade finance banks in 44 countries and five regions, as well as the best online trade finance provider.

Criteria for choosing the winners included transaction volume, scope of global coverage, customer service, competitive pricing and innovative technologies.

Global Finance selects the leaders in a specialized area of finance that is undergoing a jarring transformation.

World’s Best Trade Finance Banks 2006

REGION COUNTRY

Americas	Citigroup
Europe	ABN Amro
Central and Eastern Europe	RZB
Middle East	National Bank of Kuwait
Asia	HSBC
Argentina	Citigroup
Australia	ANZ
Austria	RZB
Bahrain	Arab Banking Corporation
Belgium	Fortis Bank
Brazil	Banco do Brasil
Canada	Scotiabank
China	Bank of China
Colombia	Banco de Bogotá
Egypt	Commercial International Bank (CIB)
Finland	Nordea
France	BNP Paribas
Germany	Deutsche Bank
Greece	EFG Eurobank
Hong Kong	HSBC Holdings
India	ICICI Bank
Indonesia	Bank Danamon Indonesia
Italy	Banca Intesa
Japan	Mitsubishi UFJ Financial Group
Jordan	Jordan Kuwait Bank
Kazakhstan	Kazkommertsbank
Kuwait	National Bank of Kuwait
Mexico	Banamex
Netherlands	ABN Amro
Nigeria	First Bank of Nigeria
Norway	DnB NOR
Oman	BankMuscat
Pakistan	MCB
Poland	Bank BPH
Portugal	Millennium bcp
Qatar	Qatar National Bank
Russia	International Moscow Bank
Saudi Arabia	Arab National Bank
Singapore	DBS
South Africa	Standard Bank
South Korea	Korea Exchange Bank
Spain	Grupo Santander
Sweden	Svenska Handelsbanken
Switzerland	Credit Suisse Group
Taiwan	Chinatrust Commercial Bank
Turkey	Akbank
United Kingdom	HSBC
United States	Citigroup
Us (Honorable Mention)	Bank of America
Us (Honorable Mention)	JPMorgan Chase
Venezuela	Banco Mercantil
Best Online Trade Finance Provider	TradeCard

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