Monday, January 23, 2017 Stamford, CT USA — European companies in need of trade finance continue to feel the effects of turmoil among the major banks. In particular, the pullback by RBS in 2014 put clients and money into motion as companies moved to find new trade finance providers.  That volatility has not completely settled and turnover levels remain high, according to a new Greenwich Report “Money in Motion” Spurs Battles For Lead Bank Relationships. 

Initially, the primary beneficiary of this turnover was BNP Paribas, which picked up new clients aggressively in 2015. In 2016 the impact has been more diffuse, with trade finance business and relationships flowing to a diverse group of competitors. 

2016 Greenwich Leaders
Nevertheless, BNP Paribas continues to lead the market with 36% penetration. Deutsche Bank, which is named as a trade finance provider by 30% of large European companies is next, followed by HSBC and UniCredit, statistically tied for third place at 25-26%, and Commerzbank and Santander rounding out the top five with penetration scores of 19%. These banks are the 2016 Greenwich Share Leaders in European Large Corporate Trade Finance. 

The 2016 Greenwich Quality Leaders in European Large Corporate Trade Finance are Commerzbank, Deutsche Bank and UniCredit.  Among the industry’s leaders, only one bank notched significant improvements in client ratings of product and service quality last year: Deutsche Bank. 

Deutsche Bank’s response to the pressures on its overall business has shifted its focus in trade finance, and they have made moves to favor a narrower targeting of large, top-end clients.  Among this target segment, companies give Deutsche Bank ratings that are meaningfully above the industry average and improving. 

Digitization Drive
Companies that move too slowly to make their treasury operations compatible with digital trade finance systems might end up paying extra fees. Given the increasing pricing pressure and a negative interest-rate environment, banks cannot afford to continue servicing trade finance customers manually. As a result, paper-based transactions will eventually be viewed and priced as an extra service.

“The message to companies is this: You will spend on digitizing and upgrading, or you’ll spend it on fees. Long term, it makes much more sense to make the investment in innovation now,” says Greenwich Associates Managing Director Dr. Tobias Miarka.