Volume of trade finance deals and documentary operations of Sberbank tops USD29 bln over 11M19

Dec 03, 2019
  • Bank expects aggregate deal volume in 2019 to top USD33 bln
  • Developing specialized digital services and remote channels to interact with clients among Sberbank’s priorities in trade finance

December 3, 2019, Moscow — Sberbank Group’s total volume of trade finance deals and documentary operations has topped USD29 bln year-to-date. The volume of deals with Sberbank’s letters of credit for transactions inside Russia reached RUB1.1 trln over 11M19.

Sberbank Group expects the aggregate volume of 2019 deals to overshoot USD33 bln. Trade finance deals with foreign companies and contractors representing all key industries from over 80 countries have been signed. The substantial volume is due to several reasons, including higher proportion of settlements in euros and rubles seen by Russian exports (up to 21.1% and 14.4%, respectively). Trade finance services are available across 12 countries where the Group operates. Sberbank (Switzerland) AG is developing Commodity Trade Finance business. In September 2019, Sberbank bought receivables from Trafigura using a distributed ledger solution.

Sberbank’s top priority in trade finance is to develop specialized digital services and remote client interaction channels. In early 2019, Sberbank Business Online profiles added LC functionality unprecedented in Russia, enabling corporate customers to enjoy the full cycle of interactions with the bank, initiate the opening of letters of credit, track full details of a deal, forward paperwork to make payments, get financing and have structured communications with the bank. Over 50% of clients have already migrated to this service to work with letters of credit. Customers claim the service is convenient and really time-saving in terms of issuance and document flow when it comes to deals.

The procedure for working with corporate letters of credit in real estate transactions has been simplified dramatically. Coming as a natural evolution of the services the bank already provides to individuals, the solution has developers, realtors, sellers and buyers of real estate as its target audience. A letter of credit is issued in 10 minutes, while a payment gets posted within a day. For remote customer support purposes, a center for product solutions has been created to help structure settlements correctly when non-standard transactions involve letters of credit.

Sberbank is a leader on the escrow accounts market under Law No. 214-FZ. The escrow accounts balance will top RUB60 bln by the end of this year, while the number of opened escrow accounts is expected to exceed 20,000. Sberbank launched the Letter of Credit + Escrow service in the summer of 2019 to improve its customer service. The solution guarantees that the funds will be transferred to escrow accounts by the time an agreement gets registered. However, developers will receive funds from escrow accounts only when their buildings get commissioned. Thus, the product secures both developers and their buyers.

Furthermore, Sberbank continues to improve its IT solutions powered by SberAPI (Application Programming Interface), enabling clients to integrate their in-house systems into Sberbank services and automatically exchange the information that documentary operations require to be conducted remotely. SberAPI for letters of credit was launched in April 2019, while SberAPI for escrow accounts in real estate transactions is slated to be rolled out before the end of 2019. These solutions help companies improve their customer experience when carrying out commercial transactions.

Evgeny Kravchenko, Director of Trade Finance Division, Sberbank:

“Sberbank is rapidly becoming a bank of seconds – issues that would take hours or even days to deal with today can be settled online in a couple of clicks from any place of the world without going to the bank. We plan to digitalize all our services and processes further. I’m sure that even complex tools of trade finance and documentary operations can be digitalized and utilized by our corporate clients as easily and conveniently as our individual clients use Sberbank Online.”