Trade finance in Asia continues to grow strongly among large corporates, both in terms of adoption rates and average spend, according to a Greenwich Associates report.
Companies utilizing trade finance are doing so for two primary reasons: as an alternative source of financing, and for process improvement in working capital management.
“The strong and growing supply of trade finance in Asia has resulted in a highly competitive market—much to the benefit of companies looking to utilize trade finance with high quality service and very low prices,” says Greenwich Associates consultant Paul Tan.
Tan notes this favorable pricing is helping to fuel an increase in the use of trade finance among companies across Asia. Both the share of large corporates in Asia (including MNC subsidiaries) using trade finance and the average amount spent each year by users has been increasing steadily.
When selecting a provider, companies are looking for banks with international networks to match their trade flows, with an overwhelming emphasis on the intra-Asian corridors, even as intercontinental linkages remain significant.
At the top of this diverse market is HSBC. Forty-two percent of large companies across Asia use HSBC for trade finance. Next is Standard Chartered Bank with a market penetration level of 36%, followed by Citi at 31%, and Deutsche Bank and ANZ Bank, which are tied at 27% and 26%, respectively.
These banks are the 2014 Greenwich Share Leaders in Asian Large Corporate Trade Finance. The 2014 Greenwich Quality Leaders in Asian Large Corporate Trade Finance are ANZ Bank, Citi and HSBC.
“Over the past 12 months, ANZ Bank and BNP Paribas have gained notable visibility in Asian trade finance and are now emerging as significant alternatives to the regional incumbents,” says Paul Tan.