The value of renminbi (RMB) denominated letters of credit (L/Cs) transacted in London has fallen away sharply according to a new report.

Published by the City of London Corporation, the report sees substantial achievements elsewhere as London apparently continues to strengthen its position as a global centre for offshore RMB business.

Trade finance reverse

The report, which is the latest in a series written by Bourse Consult, found that during 2014, the rapid growth of trade finance was reversed with a decline to RMB35.2 billion from RMB42.8 billion in 2013.

The sharpest fall was in L/Cs, which seem to have lost their lead role to alternative sources of trade financing such as loan finance, according to the report.

L/C figures

The value of L/C business in 2014 plummeted to just RMB1.825 billion, less than half the value of the RMB4.212 billion of L/C transactions written in 2013.

Transactions so far peaked in 2012, with RMB4.723 billion of L/C transactions whereas in 2011, just RMB70 million of L/C business was seen.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.