Sberbank’s Trade Finance Business Increases

Sberbank, Russia’s biggest bank, said that its trade finance and documentary business did record volumes, in 2013 amounting to about 1.3 trillion roubles (RUB), or about US$36bn.

A steady growth trend continued in Q114, with operations volumes increasing by 20% compared to the same period last year and amounted to about RUB 350bn, said the head of Sberbank CIB’s trade finance and correspondence relations division, Andrey Ivanov.

In 2013 the documentary business exceeded RUB 1.1 trillion, with service transactions in the Russian Federation showing the strongest growth. In 2013 local letters of credit (L/Cs) reached a record RUB 100bn, more than two-and-a-half times the 2012 figure. The business has maintained strong growth dynamics in 2014; in Q1 transactions exceeded RUB 36bn, 136% more than last year.

As of 1 April the Sberbank Group’s portfolio of current trade finance deals exceeds US$15bn.

The number of clients taking advantage of post-import financing continues to grow, said the group. Since 2009, the volume of transactions has more than quadrupled. In Q114 the volume of L/Cs for imports issued by Sberbank with financing/guarantee increased by more than 50% compared to the same period last year.

Documentary L/Cs within the client’s credit limit also continue to grow. Over the past two years, the portfolio of these commitments has more than tripled and at the end of 2013 exceeded US$1.3bn. As of 1 April the volume of existing limits amounted to about US$4.8bn, more than 80% higher than last year.

Ivanov said that the introduction of matrix management for trade finance business had seen steady increase in the volume of transactions at Sberbank’s foreign subsidiaries in the Commonwealth of Independent States (CIS), Central and Eastern Europe (CEE), Turkey and Switzerland.

“Given the significant development prospects made possible by the Sberbank Group’s geographical expansion, we are actively building a global platform for trade finance, which already allows us to offer clients broader and more flexible integrated solutions and facilitate trade flow,” he added.

Last month, Sberbank’s board approved its trade finance and documentary business five-year development strategy. It includes “ambitious goals and aims to be the largest servicer of foreign trade turnover in the Russian market by the end of 2018”.

The main factor driving the business’s growth will include products such as aviation financing, commodity trade finance, EXIAR (Russian export insurance agency) coverage finance and servicing domestic trade flow with L/Cs.

“Despite the current economic situation and political instability in the world, we do not see any fundamental reason to reduce our business activities,” said Ivanov. “At present international financial institutions (FIs) are providing the usual level of financing, we have begun cooperating with Chinese banks and resumed talks with export credit agencies.”

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