More Asian Companies Turn to Trade Finance

Companies across Asia are utilising trade finance as a new source of capital and for process improvement in working capital management, according to a report from Greenwich Associates.

The report, entitled
‘Across Asia Corporates’ Use of Trade Finance Increases’
, notes that in recent years the leading trade finance providers in Asia had been losing market share to local providers with expansion ambitions and banks from Japan and elsewhere. These new competitors won client relationships largely on the basis of aggressive pricing.

“The strong and growing supply of new providers has resulted in a highly competitive market – much to the benefit of companies looking to utilise trade finance with high quality service and very low prices,” said Greenwich Associates consultant Paul Tan.

When selecting a provider, companies are looking specifically for banks with robust international networks, with an emphasis on the fast-growing intra-Asian corridors, as opposed to inter-continental coverage.

At the top of this diverse market is HSBC, used by 42% of large companies across Asia for trade finance. Next is Standard Chartered Bank with a market penetration level of 36%, followed by Citi at 31%, and Deutsche Bank and ANZ Bank, which are tied at 27% and 26%, respectively. These banks are the
2014 Greenwich Share Leaders
in Asian large corporate trade finance. The
2014 Greenwich Quality Leaders
in Asian large corporate trade finance are ANZ Bank, Citi and HSBC.

“Over the past 12 months, ANZ Bank and BNP Paribas have gained notable visibility in Asian trade finance and are now emerging as significant alternatives to the regional incumbents,” said Tan.

In China, Bank of China (BOC) maintains a dominant position in trade finance with a market penetration level of 52% followed by HSBC (37%) and Deutsche Bank (34%). These banks are the
2014 Greenwich Share Leaders
in large corporate trade finance in China. The
2014 Greenwich Quality Leader
is Deutsche Bank.

Standard Chartered Bank leads the
2014 Greenwich Share Leaders
in large corporate trade finance in India with a market penetration level of 52%, followed by the trio of HSBC, State Bank of India (SBI) and Citi. The 2014
Greenwich Quality Leaders
in Indian large corporate trade finance is Citi.

HSBC dominates in Hong Kong, leading the
2014 Greenwich Share Leaders
with a 61% market penetration level and is also the
2014 Greenwich Quality Leader
. Standard Chartered Bank and ANZ Bank round out the
2014 Greenwich Share Leaders
in trade finance – Hong Kong. In Singapore,
the 2014 Greenwich Share Leaders
are a three-way tie between HSBC, DBS Bank and Standard Chartered.

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