Global trade finance revenues have reached a seven-year low, with a 5 per cent decline year-on-year for the first half of 2017 according to a recent report.

Letters of credit (L/Cs) however have performed much better than more sophisticated structured trade finance products.

Global survey

Total trade finance revenues for the ten largest global transaction banks billion declined to US$2.8 billion in the first six months of this year compared with US$2.9 billion in the same period in 2016, according to the latest report by banking analytics company, Coalition.

The report used data from Bank of America Merrill Lynch, Barclays, BNP Paribas, CITI, Deutsche Bank, HSBC, JP Morgan, Société Générale, Standard Chartered and Wells Fargo.

Performance variations

Total revenues contemplate traditional trade finance offerings such as L/Cs as well as structured trade finance products.

Structured trade finance revenue declined significantly to US$0.9 billion in the first half of 2017 compared to US$1 billion for the first half of 2016, and US$1.2 billion in the first half of 2011.

Traditional trade finance products such as L/Cs meanwhile performed well the Coalition report says, with several banks reporting improved volumes.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.