Tuesday, August 27, 2019 Stamford, CT USA — Large companies in Asia are turning to the biggest banks in the region for support as they navigate disruptions caused by the U.S.-China trade war. In some cases, that means passing on lower-price providers of trade finance and other services to get access to big banks’ international networks and expertise—a trend that is likely to the benefit of the 2019 Greenwich Share Leaders in Asian Large Corporate Trade Finance.

For the past decade, new and aggressive providers have been flooding Asian trade finance, creating a buyer’s market in which companies can shop for rock-bottom pricing. With the onset of global trade wars, however, large Asian companies are realizing the value of robust international networks, premium service and advice.

As recently as 2011, nearly half (46%) of large Asian companies used one of the market’s top five banks for trade finance. As the business became more crowded and commoditized, that fell to just over a quarter (27%) in 2018. However, that seven-year losing streak for the biggest banks came to an end last year, as the share of large companies reporting that they use one of these large providers for trade finance climbed to 29% from 27%.

What changed? Starting in 2018, companies began feeling the impact—or at least anticipating the impact—of the trade wars. The large Asian companies participating in the Greenwich Associates 2019 Asian Large Corporate Trade Finance Study said the U.S.-China trade war has already created a host of challenges ranging from operational disruptions to currency volatility, and new scrutiny in critical functions like trade finance.

Looking to Key Banks for Help
Companies need help with these issues, and—although most companies use up to a dozen banks, on average, for trade finance alone—they are turning to a handful the region’s leading banks to get it.

What differentiates providers in today’s market is not price, but rather a bank’s ability to provide higher-value service like advice and support in supply chain management and other areas. The new tariffs are forcing companies around the world to reroute supply chains. They are also prompting many Chinese companies to seek locations for new production facilities and new customers for their products. In all these cases, banks with broad networks can play an instrumental role in both finding the right locations and partners, and helping companies finance and execute these changes.

All of the 2019 Greenwich Leaders in Asian Large Corporate Trade Finance have risen to that challenge in one way or another. Indeed, when asked which banks they would most likely call on for cross-border referrals/account opening if trade patterns continue to change, companies often cited HSBC, Citi, Standard Chartered, BNP Paribas, and DBS—the banks that make up the list of this year’s Greenwich Leaders.

Click here for the full list of 2019 Greenwich Share, Quality, and Excellence Leaders in Asian Large Corporate Trade Finance.​