Russia's Sberbank has entered into co-operative agreements with two Moroccan banks with the aim of boosting the supply of letters of credit (L/Cs) and other trade finance services to Russian companies doing business in Africa.

The Russian bank says it made the agreements with Attijariwafa Bank Group and Banque Centrale Populaire to capitalise on growing trade volumes in Africa.

Russian companies

Sberbank plans at first to use the co-operative arrangements to help it offer trade finance products, including L/Cs and guarantees, to Russian companies trading with Africa.

According to the bank's executive director, head of Middle East, North Africa and China, Maxim Osintsev, initially Sberbank's work with the Moroccan banks will enable it to develop an understanding of how to do business in Africa.

Beyond trade finance

In the longer term, the bank is contemplating moving beyond trade finance and may look to support Russian corporate clients entering the region with other banking services.

Trade has grown rapidly between Africa and Russia from US$2 billion in 2009 to US$3 billion in 2013, although this is a very low figure in comparison with China-Africa trade which topped US$200 billion last year.

Accelerated growth

Osintsev however sees this as an opportunity and maintains that, "this low base means that there are good opportunities for accelerated growth and there is a major opportunity to service this trade flow."

Sberbank is looking at Egypt, Morocco and potentially Nigeria as trading counterparty countries he adds.

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