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L/Cs aid Deutsche Bank's results

Letter of credit business eased Deutsche Bank's losses in the first quarter of 2008. The bank reported a net loss of EUR 141 million, or 27 cents per share, for the first quarter and a loss before income taxes of EUR 254 million. In financial market conditions that Deutsche Bank's chairman Josef Ackermann described as "the most difficult in recent memory", the bank nevertheless reported solid results in its global transaction banking. It generated net revenues of EUR 661 million in the first quarter, an increase of EUR 49 million, or 8 per cent up on the first quarter of 2007. The rise was predominantly attributable to activities in trade finance, domestic custody and cash management, the bank said. In trade finance, revenues increased primarily from higher volumes in L/C business and stronger guarantee business in the Asia/Pacific region and in Europe, according to Deutsche Bank.

Export-Import Bank targets Indian aircraft

The Export-Import Bank of the US wants to provide a massive USD 6 billion in L/Cs to Indian carriers for acquiring aircraft from US producers. The bank has set this ambitious target in line with its remit to provide credit assistance to US exporters - and it is also offering pre-approved L/Cs of USD 2.2 billion to eight Indian financial institutions for onward lending against imports from the US. It has offered L/Cs of USD 250 million each to Industrial Development Bank, Infrastructure Development Finance Company, Punjab National Bank, State Bank of India and the India Infrastructure Finance Company. These dollar-denominated L/Cs are available at half the rate at which they are available in India. They include the Libor-linked interest rate, a margin on that and a guarantee fee, which changes with the longevity of the loan. The bank's current exposure to Indian companies is USD 3.5 billion, accounting for 6 per cent of the bank's total global exposure.

Bolero adds Nordic customers

A financial services group in the Nordic and Baltic region, Nordea, and the neutral secure platform enabling paperless trading, Bolero International, have entered into an agreement that allows Nordea to offer Bolero's automated letter of credit solution to more customers. The solution is provided via Bolero's multi-bank service, which automates the end-to-end lifecycle of L/Cs and guarantee instruments for both importers and exporters. This, according to Bolero, means fewer discrepancies and time delays compared with traditional paper based or partially electronic processes. Nordea says it is already live on the Bolero multi-bank service with a Finnish global customer and is now in a position to extend this service to more clients. "There is no doubt that the market for multi-banking solutions is growing," says Nordea's head of trade and project finance, Claus AsbjØrn Stehr.

Central and Eastern Europe top ERBD guarantees

Russia, Azerbaijan, Tajikistan, Kazakhstan and Bosnia Herzegovina have emerged as frequent users of guarantees provided under the European Bank of Reconstruction and Development's (EBRD's) programme that guarantees letters of credit (L/C) and other trade finance instruments. In the two years to end-2007, Russia led the way, notching up 285 separate deals under the trade finance programme (TFP). Transactions involving Azerbaijan featured 123 times, while 119 deals involving Tajikistan, 109 transactions with Kazakhstan and 100 financings with Bosnia Herzegovina were closed in the same period. Russia, Kazakhstan, Ukraine, Georgia and Azerbaijan emerged as the top five countries in terms of trade volumes guaranteed by the TFP, according to EBRD figures. The latest EBRD figures for the 29 countries in its area of operation show that the total volume of transactions financed by the TFP in 2007 increased to EUR 781 million from EUR 707 million in 2006. Under TFP, guarantees may be used to secure payment of several types of documentary credits issued or guaranteed by issuing or confirming banks.