Announcing Greenwich Share and Quality Leaders in Asian Trade Finance
Evolving market forces coupled with falling pricing of trade finance has put pressure on global banks and created an opportunity for providers from Japan and other Asian markets—and even some western banks eager to build a presence in Asia. For large companies across Asia, the result has been a strong and ready supply of trade finance credit and a sharp decline in its price.
According to a new report from Greenwich Associates, Flattening Trade Finance Market in Asia Benefits Regional Players, the share of large Asian companies employing some form of trade finance has increased steadily from just 61% in 2011 to 76% in 2015. That share now tops 85% in India and averages 82% in Southeast Asia ex-Singapore. In many of these markets, trade finance is used not primarily as a means to mitigate trade risk, but rather as an important alternative source of corporate funding.
Spoiled for Choice
Pricing for trade finance has plummeted in recent years due to an influx of supply from Japanese banks, leading Asian banks, emerging regional players in Asia and, to some extent, foreign banks that have prioritized Asia as a key growth area. “Many of these players have been willing to be extremely competitive in trade finance pricing, often motivated by gaining access to the broader relationship with large Asian companies that they believe will pay off in terms of cross-sell and profitability over a long-term horizon,” says Greenwich Associates consultant Paul Tan.
The annual Greenwich Associates trade finance study in Asia shows that large companies are spoiled for choice. In addition to the incumbents (notably, HSBC, Standard Chartered and Citi), large Asian companies increasingly turn to comparatively new entrants to the market (at least for the large corporate segment). Over the past few years, large corporates increasingly cite trade finance relationships leading local banks like HDFC, emerging regional players like DBS Bank, and one or two foreign banks like BNP Paribas that are looking to expand in the region.
2015 Overall Greenwich Leaders Asian Large Corporate Trade Finance
Reflecting these shifts, the list of 2015 Greenwich Share Leaders in Asian Large Corporate Trade Finance consists of the familiar, global names of HSBC, which tops the market with a market penetration score of 42%, followed by Standard Chartered at 36%, Citi at 28% and Deutsche Bank at 25%.
However, the presence of DBS Bank in that list with a market penetration score of 24% illustrates how the gap between the leading global banks and the rest of the market is narrowing, with the likes of ANZ Bank, BNP Paribas and Bank of China all putting in a strong showing, and, at a lower level of penetration, competitors like BTMU, ICBC, Mizuho, and State bank of India all maintaining meaningful footprints.
The 2015 Greenwich Quality Leaders in Asian Trade Finance are ANZ Bank, BNP Paribas and HSBC.
2015 Greenwich Leaders Asian Large Corporate Trade Finance By Country
In China, the 2015 Greenwich Share and Quality Leader is Bank of China.
The 2015 Greenwich Share and Quality Leader in Large Corporate Trade Finance in Hong Kong is HSBC.
In Singapore, the 2015 Greenwich Share Leader is Standard Chartered and ANZ Bank is the 2015 Greenwich Quality Leader.
The 2015 Greenwich Share Leaders in India are State Bank of India and HSBC. The 2015 Greenwich Quality Leader in India is HSBC