Tuesday, September 15, 2020 Stamford, CT USA — Banks whose trade finance businesses were interrupted by the near-total shutdown in global trade earlier this year are recouping some lost revenues by helping corporates restore and adjust supply chains disrupted by the COVID-19 crisis.
Almost three-quarters of the large European companies participating in the Greenwich Associates 2020 Global Trade Finance Study had their business or supply chains negatively impacted by the COVID-19 crisis. Although a smaller share of Asian corporates experienced these same issues, more than a third of companies impacted are now in the process of altering supply chains based on their experiences during the pandemic and the current geopolitical environment.
As companies in both regions rebuild and reroute their supply chains, they are looking to their banks for strategic advice as they enter the rebuilding phase. That demand for advice is benefitting the 2020 Greenwich Leaders in Large Corporate Trade Finance, virtually all of which are large banks with expansive footprints in transaction banking and well developed advisory capabilities.
In Europe, the list of 2020 Greenwich Share Leaders is topped by BNP Paribas, closely followed by UniCredit and HSBC. In Asia, HSBC tops the list of 2020 Share Leaders, followed by DBS, Standard Chartered Bank, BNP Paribas, and Citi. DBS and HSBC also claim the title of 2020 Greenwich Quality Leaders in Asia, a distinction that goes to BNP Paribas and UniCredit in Europe.
Among these industry leaders, the banks best positioned to capitalize on companies’ growing need for advice might be DBS and HSBC, the winners of the 2020 Greenwich Excellence Award for Quality of Advice in Large Corporate Trade Finance in Asia, and Bank of America, which claims that honor in Europe.
COVID-19 Effects on the Competitive Landscape in Europe
At the outset of the crisis, it appeared the pandemic and the global shutdown would prompt large corporates to turn closer to home for support, potentially placing international competitors at a disadvantage. “In fact, it remains to be seen how the consequences of pandemic lending play out,” says Greenwich Associates Managing Director Dr. Tobias Miarka. “Will domestic banks be able to double-down on the lending commitments they provided during the crisis and convert them into cross-sales and wallet share, or will the lending weaken domestic competitors by increasing non-performing loans and subsequent write-downs?”
COVID-19 Effects on the Competitive Landscape in Asia
The initial shock from the pandemic revealed different vulnerabilities across markets and industries in Asia. While sectors like transportation, industrials and energy have been severely impacted, other sectors like healthcare and telecom have been relatively less affected. “Across all these sectors, banks have helped to (somewhat) mitigate the impact of the crisis by extending liquidity/credit/terms, demonstrating operational agility and by providing digital solutions,” says Greenwich Associates Head of Asia, Gaurav Arora.