visimoney
TLDR:
- Major banks are showing a decline in trade finance activity due to sluggish global trade volumes and weaker commodity prices.
- While some markets like Europe and Singapore are experiencing declines, banks in the UAE are seeing growth in both volume and revenue.
Bank results for 2023 have revealed a muted trade finance market, with major banks reporting declines in trade finance activity. This is attributed to sluggish global trade volumes and weaker commodity prices affecting the market. In Europe and Singapore, banks have recorded slight declines in trade revenue, while lenders in the UAE have experienced growth in both volume and revenue.
HSBC and Standard Chartered in the UK and Europe reported flat trade activity, with revenue in global trade and receivables finance dropping by US$100 million year-on-year at HSBC. Standard Chartered experienced a 1% drop in trade and working capital operating income. The cautious tone in Europe is reflected by a target set by Standard Chartered to grow trade and working capital income by 6-8% between 2024 and 2026.
Other European banks like ING and Rabobank reported mixed results, with ING seeing a 29% jump in profit from daily banking and trade finance, while Rabobank attributed a smaller trade and commodity finance book to lower commodity prices. Singapore banks also faced challenges, with DBS seeing declining transaction fees, offset by high underlying interest rates.
Meanwhile, banks in the UAE showed growth in their trade finance businesses, with ADCB, Emirates NBD, and Mashreq reporting increases in trade finance commission income. First Abu Dhabi Bank saw a rise in trade finance fee income, signaling a more positive trend in the market compared to other regions.
Overall, the trade finance market continues to be influenced by global economic conditions, with banks adapting to different rates of growth and decline across various regions.
