HSBC takes the top spot in Euromoney’s Trade Finance Survey for the third year running, with Deutsche Bank in second place and UniCredit in third. Citi falls out of the top three to take fourth position. One of the biggest upsets is JPMorgan, which falls to 17th after reaching ninth place last year.
European banks dominate the top 10 with Standard Chartered, Commerzbank, BNP Paribas, Crédit Agricole, Santander and Societe Generale making the top 10 with Deutsche and UniCredit.
“Many of the American banks have enough trade business in their home market,” says Eric Li, research director at Coalition. “So it’s no surprise that when it comes to a global survey, European banks will thrive.”
Regionally, HSBC leads in Africa, Asia Pacific, North America and the Middle East, the latter being a stronghold for the bank, which has held the top spot in the region since 2017. It is also a region that has garnered much more interest from our respondents this year, with responses for the region increasing by 65% from 142 to 235.
“Although oil and gas will play a large part in our trade business in the Middle East, diversification across the region fuels our business there,” says Sunil Veetil, head of global trade and receivables finance for the Middle East, north Africa and Turkey at HSBC.
“The infrastructure, services and logistics industries have been major drivers for trade in the region over the last 12 months – something we will continue to see moving forward – and major events such as the Expo 2020 Dubai, FIFA World Cup in 2022 and the ongoing Suez Canal Area Development Project will only bolster trade in and out of the area,” he says.
In June 2019, HSBC completed a dual-platform blockchain transaction between the Middle East and Hong Kong, followed by three more deals in the region. “Our technology drive in the Middle East reflects our own digital drive,” says HSBC’s Natalie Blyth, global head of trade and receivables finance.
“For example, the UAE is developing its own blockchain technology strategy, which makes the region ripe for digital development in trade finance,” says Veetil.
As well as ranking third in the overall results, UniCredit proved to be a corporate favourite, topping the customer satisfaction ratings this year. “UniCredit sees trade finance as core to the bank’s overall success,” says Luca Corsini, head of global transaction banking at the pan-European bank.
Olivier Khayat, co-chief executive of commercial banking, western Europe, and Gianfranco Bisagni, his counterpart in central and eastern Europe, both spent time overseeing UniCredit’s transaction banking business – the knowledge they gained in the sector accompanying them to senior management.
“Our commitment to trade finance and transaction banking more broadly comes from the highest echelons of the bank and filters down to all of our customers. This sends a strong message to both clients and competitors,” says Corsini.
In the market leader rankings, UniCredit’s success reflects the bank’s strong position in central and eastern Europe. In western Europe, the bank is only present in retail in Italy, Germany and Austria. However, UniCredit does well in these countries – in Austria and Italy it tops the rankings and in Germany it is third.
“It is the bank’s ambition is to be number one in trade finance in each of its core geographies,” says Corsini.
Environmental, social and corporate governance (ESG) issues are also making themselves felt in trade finance.
“Where ESG was a niche concept, picked up by a few corporates and countries in the past, it is slowly making its way into the mainstream and is beginning to influence banks’ business overall,” says Stefan Hoops, head of corporate banking at Deutsche Bank.
“ESG and sustainability will not only have greater impact on corporate credit ratings and the supply chain but the way in which individuals respond to surveys such as Euromoney’s,” he says.
But for corporates to implement successful ESG and sustainable policies, standards will be needed.
“Until there are clear regulations and rules round ESG compliance for corporates, banks will lead the charge, we will have the responsibility to reward and even punish corporates as the sector develops,” says Hoops.