The use of international trade finance among large Western European corporates continues to increase with BNP Paribas, Deutsche Bank and HSBC as the leading providers in terms of market penetration, reports Greenwich Associates.
The market intelligence and advisory services provider says that to satisfy increasing international needs, corporates report using more banks compared to previous years and on average, European corporates are active in more regions than their peers in Asia or North America, indicating that Europe-centric banks need broad network capabilities to meet their clients’ needs.
In its newly-released report, entitled
‘European Trade Finance: Global Banks Dominate While Corporates Tap Specialists for Expertise’
, Greenwich says that the competitive landscape among trade finance providers in Europe is diverse and fragmented. Large European companies have adopted broad strategies for international growth and are forming relationships with banks delivering high-quality support in these new markets.
Indeed, demand for local service and expertise is driving some companies to bypass their traditional trade finance providers in favour of direct relationships with banks domiciled in targeted foreign markets. In this increasingly competitive environment, BNP Paribas leads with a market penetration of 32% of large European companies, followed by Deutsche Bank at 29% and HSBC at 27%.
Just behind these three leaders is a group of four banks, made up of Commerzbank, Nordea, Royal Bank of Scotland (RBS), and UniCredit, which are all tied with market penetration levels of 18–19%. These banks are the 2014 Greenwich Share Leaders in European Large Corporate Trade Finance. The 2014 Greenwich Quality Leaders are Deutsche Bank and UniCredit.
Among Europe’s top five providers of trade finance, BNP Paribas and Deutsche Bank showed the biggest increase in footprint last year. However, notes Greenwich, as companies seek out the international trade finance service they require, Europe’s largest incumbent trade finance providers are not necessarily the main beneficiaries.
“Companies’ needs in specific countries and regions have expanded to the point at which many of them have begun to hire specialist banks with particular expertise and coverage within target international markets,” said Greenwich Associates consultant Dr. Tobias Miarka.
“Among the biggest beneficiaries have been ANZ (for services into Asia Pacific) and Banco Itau (for services into Latin America).”
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