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Global Trade Trends and Challenges
Summary Results – ICC Global Trade Finance Survey 2014
Vincent O’Brien
Chair ICC Banking Commission
Market Intelligence Group
Our value proposition 2011-2014
1.
2.
3.
STANDARD
POLICY
ANALYTICS
SETTING &
&
&
RULE WRITING REGULATORY PUBLICATIONS
4.
EDUCATION,
CERTIFICATION
& E-LEARNING
5.
DISPUTE
RESOLUTION
(DOCDEX)
ICC Banking Commission
The leading and trusted authority
for trade finance
Vincent O’Brien
Chair, ICC Banking Commission
Market Intelligence Group (MIG)
Vin
Our value proposition 2011-2014
1.
2.
3.
STANDARD
POLICY
ANALYTICS
SETTING &
&
&
RULE WRITING REGULATORY PUBLICATIONS
4.
EDUCATION,
CERTIFICATION
& E-LEARNING
5.
DISPUTE
RESOLUTION
(DOCDEX)
6
GLOBAL TRADE FINANCE SURVEY 2014
Reporting
6
6
2014 Global Survey - Banks & Countries
- 298 Banks
127
Countries
from
9
slides
The Story Starts September 2008
Growth in world merchandise exports trade by region 2007Q1-2014Q2
(Year to year % change in dollar values)
70
World
50
North America
30
South and Central
America
10
Europe
-10
Commonwealth of
Independent States
-30
Asia
-50
Others
10
THE PULL EFFECT IS NO LONGER PULLING.
World merchandise trade volume and real GDP growth, 1990-2015P
+ 10-year moving average trade/GDP ratio
2.5
2.0
1.4
1.5
1.0
0.5
0.0
Product shares in world merchandise exports since 1900 (in %)
nes
Manufactures
Fuels and mining products
Agricultural products
100
80
44
57
35
29
20
15
12
14
54
16
9
9
10
23
22
64
65
2011
2013
14
28
16
60
19
11
40
3
6
52
20
40
40
1900
1925
45
45
1938
1955
61
70
75
1990
2000
55
0
1963
1970
1980
Source: WTR 2013
GLOBAL TRADE TRENDS ME FOCUS
Share, 2000/2013 (in %)
2013
2000
Europe, 35.3%
Europe, 40.8%
Africa, 2.3%
South and
Central America,
3.1%
CIS, 2.2%
Asia, 28.4%
Africa, 3.2%
Asia, 33.4%
North America,
19.0%
Middle East,
7.2%
TOP 5 ME Exporters
United Arab
Emirates,
0.77%
Iran
Iraq
0.45% 0.32%
CIS, 4.1%
North America,
12.9%
Middle East,
4.1%
Saudi Arabia,
Kingdom of,
1.20%
South and
Central
America, 3.9%
TOP 5 ME Exporters
United Arab
Emirates,
2.01%*
Saudi Arabia,
Kingdom of,
2.00%
Qatar Kuwait Iraq
0.73% 0.61% 0.48%*
*Estimated value
Source: WTO secretariat
Emerging Asia - Primary Market Focus for Trade Finance
40% 37%
14
Trade Finance Activity Up 2014
68% 52%
15
Requests for CONFIRMATION OF LETTERS OF CREDIT
59% 51%
Requests for Guarantees and Standby Letters of Credit
61.25% increased demand for Guarantees
69.74% increased demand for Standby LC’s
Guarantee Claims - Injunctions and Refusals
Importance of Supply Chain Finance to Industry
65.74%
Increase in Demand for BPO
24.23%
Trends in Trade Finance Fees
SWIFT Trends in Traditional Trade Instrument Traffic
Issuance of letter of credit MT 700
SWIFT trade traffic – 2013 statistics
2013 highlight
• In 2013, the SWIFT trade volume shows a decrease of 0.65% (much
less than last year decrease of 2.22%). This is due to a decrease of
5.80% in category 4, while the category 7 shows an increase of
0.97%.
• Asia-Pacific continues to register far greater volume of MT 700 with
68% (import) and 75% (export) of the world traffic in 2013. It is also
the region that increased the most.
• Top countries in volume of MT 700 are China, Bangladesh, Hong
Kong, Korea, India.
• The region that shows the highest annual decrease (MT 700) is
North America.
• The average value of a Letter of Credit (MT 700 only, amount
converted to USD) in 2012 was USD616,000. In 2013, it is
USD653,000 (+6%).
• Renminbi (RMB) became 2nd most used currency
in trade finance, overtaking the Euro
Berne Union – Growth in Export Credit Insurance
Factoring: Comparison
Factoring, LC & Credit Insurance Comparisons with World Exports 2009-2013 (USD Millions)
2009
Cross border factoring
2010
2011
2012
2013
CAGR
236,607
326,724
355,379
467,860
555,879
23.8%
World factoring
1,835,489
2,190,002
2,611,371
2,814,004
3,078,643
13.8%
Credit insurance
1,122,608
1,257,794
1,495,227
1,538,609
1,630,925
9.8%
Letters of credit (LC)
2,635,125
2,700,700
2,806,965
2,854,918
3,125,957
4.3%
Total world exports
12,177,642
14,850,565
17,816,372
17 930 469
18,378,730
10.8%
Sources:
•
Factoring figures from FCI. World Factoring includes both domestic and cross border factoring volume
•
Short-term sovereign credit insurance figures only from Berne Union (2013 estimated)
•
The LC figures from ICC/SWIFT study. Swift does not release LC issuance, but in December 2010 its board agreed to carry out a ‘trade
snapshot’, releasing the number of MT700 commercial standby and guarantee messages, including average invoice size, All figures are
estimates based on actual data. Except the 2010 figures which are based on the number of MT700 messages issued in the year and the
average invoice size for the month of December only. 2009 figures are calculated based on the % change in the number of MT700
messages created year on year
•
The world merchandise export figures from the WTO (2013 estimated based on revised projected growth rate of 2.5%)
Hottest Topics on
Radar
68% declined transactions
due to KYC & AML
•
• 31% closed correspondent relations
due to KYC & AML
• 41.03% of respondents reported that complying with
sanctions restricted trade finance operations
• ‘COMPLIANCE’ as the biggest single burden
facing trade finance.
Global Trade Trends and Challenges
Summary Results – ICC Global Trade Finance Survey 2014
Vincent O’Brien
Chair ICC Banking Commission
Market Intelligence Group