Sberbank of Russia: the results of trade and export finance in 2010
31 December 2010, Moscow – In 2010 Sberbank of Russia (RТS: SBER, MICEX: SBER03) increased the portfolio of trade finance transactions by more than 100% up to 4 680 mln US Dollars, closed more than 810 deals using the varied trade finance instruments for the total amount of around 3 800 mln US Dollars in equivalent being six times the volume of 2009.
One of the core businesses in the sphere of trade finance in 2010 was the arrangement of trade related bilateral loans for the purpose of financing foreign trade activities of Sberbank’s clients. The total volume of arranged deals, including pre-export finance, amounted to 2 102 mln US Dollars with the tenors of financing from 1 to 5 years.
The main partners of Sberbank in the program of trade related bilateral loans in 2010 were the following financial institutions: Citibank Europe Plc., Oversea – Chinese Banking Corporation Limited, Wells Fargo Bank N.A., WestLB AG, Commerzbank AG, ING Bank N.V., Banca Intesa, BANESTO, Bank of America Merrill Lynch, HSBC Bank Plc, BNY Mellon, Landesbank Berlin AG, Unicredit Group, Raiffeisenlandesbank Oberösterreich Aktiengesellschaft, BMO Financial Group, KfW IPEX–Bank GmbH, NordLB, Bayerische Landesbank, WGZ BANK AG and others.
Realization of trade related bilateral loans program and pre-export finance enabled Sberbank to offer its clients new, more competitive products for the purpose of financing their foreign trade activities.
Sberbank actively used plain vanilla trade finance instruments. Over 570 import letters of credit issued by order of Sberbank’s clients, were confirmed and financed in 2010 for the total amount exceeding 1 200 mln US Dollars with the counterparties from 45 countries.
The geography of the Bank’s operations during the past year was also expanding. Aside from usual transactions with the counterparties from Europe and USA there was a substantial volume of transactions related to the financing of deliveries from Asia, which reflects one of the strategic directions of Sberbank’s business enhancement in terms of trade finance.
During 2010 Sberbank has increased by 3.5 times the volume of letters of credit confirmation and IRUs issuance by order of Russian and CIS banks. The total volume of such operations exceeded 430 mln US Dollars, the majority of undertakings is related to subsidiary banks of Sberbank in Belorussia, Ukraine and Kazakhstan that reflects Sberbank’s strategy for expansion in the foreign trade finance markets.
In 2010 Sberbank recommenced its partnership with international Export Credit Agencies on developing new structures for insurance/providing guarantees and long term financing (up to 18 years) of export-import operations of Sberbank’s clients. Meanwhile the volume of transactions in the pipeline is more than 3 000 mln US Dollars.
Andrey Donskikh, Deputy Chairman of the Board, Sberbank, said: “Development of trade and export finance is an important part of the new Sberbank’s corporate business strategy. Trade finance instruments, including long-term financing with ECA coverage, allow us to provide fundamentally new products to our clients. The priority of this business for Sberbank is justified by recent changes in the structure and creation of new trade and export finance team in the beginning of 2010 that has already resulted in the twofold growth of business. And we are not going to rest on our laurels. The new medium-term TEF business expansion strategy has been developed; it includes multiple growths in the volume of financing of the foreign-trade operations of our clients, implementation of up-to-date broad range of products, significant increase in fee and interest income that will allow Sberbank to hold the leading positions on this segment of the market”.
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Sberbank of Russia
Tel. +7(495) 957 5721