OREANDA-NEWS. January 06, 2014. A record number of TF&DOs were implemented in 2013, amounting to about RUB 1.3 tln (USD 43 bln).

The volume of documentary business exceeded the equivalent of USD 33 bln, at the same time documentary transactions within Russia demonstrated the strongest growth. The volume of domestic LCs in 2013 reached a record RUB 100 bln, 2.5 times the corresponding figure for 2012. Stable growth of documentary operations confirms demand for the documentary business’s products and shows that Russian trade is moving towards civilized forms of payment.
Over the course of the year more than 1500 trade finance deals were implemented amounting to more than USD 10.5 bln, as a result the total value of the debt portfolio rose more than 30%, totaling USD 14 bln at the end of the year.

The largest share of the portfolio is made up of foreign trade operations financing for Sberbank’s clients. Notable deals include a USD 600 mln club deal provided by the largest banks in the Middle East, USD 500 mln raised as part of a partnership agreement with OCBC bank as well as a series of deals with leading Chinese financial institutions. The combined investments attracted over the course of the year amounted to USD 5.9 bln.

The positive dynamics seen in recent years continued with growing demand for classic trade finance products with documentary instruments for corporate clients. The number of clients embracing the advantages of post-import financing has steadily increased – clients include major, as well as large and small and medium sized businesses. Since 2009, the volume of import LCs with financing has increased more than 4 times, and amounts to 77% of the total volume of issued letters of credit.

The number of unsecured LCs within risk limits issued by Sberbank shows strong growth. Over the last two years the debt portfolio has increased more than three-fold, exceeding USD 1.3 bln at the end of 2013.

Moreover, cooperation in the area of trade finance services for financial institutions continued to expand.

In 2013, cooperation with foreign export credit agencies (ECA) actively picked up. The volume of new operations in this area amounted to about USD 1.5 bln for the reporting period. As a result, the portfolio of borrowed funds and ECA loans increased more than 2.5 times, exceeding USD 2 bln at the end of the year. Moreover, in 2013 a series of framework agreements were signed with foreign partners including a general agreement with Japan Bank for International Cooperation (JBIC) in the amount of USD 600 mln, a memorandum of understanding with Export-Import Bank of Korea in the amount of USD 1.5 bln and several others.

Thanks to the successfully implemented strategy for the development of international operations and the introduction of a matrix management system for the trade finance business, the volume of TF&DOs (including guarantees and those secured by ECA) completed by the Sberbank Group’s foreign subsidiary banks in the CIS, Central and Eastern Europe, Turkey and Switzerland reached almost USD 9 bln.

The Sberbank Group offers a complete line of trade finance products and documentary business based on the best international practices. Moreover, the Sberbank Group is actively diversifying its product range and developing new business lines. In 2013, the first finance transactions with EXIAR coverage and in the area of aircraft financing were implemented. Sberbank is the first Russian bank to launch the new product line – Commodity Trade Finance – to finance commodity deliveries based on Sberbank (Switzerland) AG. A significant step in expanding the product line was to provide credit resources to international financial institutions. The first deal was made with the largest bank in the world – Industrial & Commercial Bank of China.

Deputy Chairman of the Board of Sberbank and Head of Sberbank CIB, Andrey Donskih said: “For several years, Sberbank has accelerated growth and increased profits from its trade finance and documentary business. Today, we are a dynamic leader with the best product offerings; for the second year Global Trade Review magazine named Sberbank the best trade finance bank in the CIS. We are the only Russian bank in the publication’s list of the world’s best trade finance banks. Given the large prospects for development against a background of the Sberbank Group’s geographical expansion we are beginning to transform our business into a Trade Finance Global Platform. This will allow us to offer customers the most extensive and flexible integrated solutions for trade flow and significantly increase the bank’s revenue in this area, and also help the bank quickly become the leader in the international trade finance market.”