Italian banking group Intesa Sanpaolo has signed a EUR 75 million agreement with the European Investment Bank (EIB) to become a confirming bank in its Trade Finance Facility (TFF) for Greece.

Established in June 2013, the TFF was the EIB's first ever trade finance facility and covers most of the risk attached to Greek letters of credit (L/Cs).

Broader coverage

Intesa Sanpaolo joins other confirming banks including Citi, Commerzbank and HSBC in the TFF for Greece and broadens its coverage by supporting trade flows between Greece and Italy.

The facility is geared to support foreign trade activities of Greek small- and medium-sized enterprises (SMEs) and mid-caps.

Under the TFF, the EIB is providing EUR 500 million in guarantees for foreign banks covering 85 per cent of their risk vis-à-vis their Greek counterparts for L/Cs and other trade finance instruments, to mitigate the risks of non-payment and default.

Economic recovery

Specifically, the EIB is providing its guarantee on a portfolio of L/Cs as well as other trade finance instruments confirmed by international banks.

This aims to alleviate cash collateral constraints otherwise imposed on most SMEs and mid-caps and increase access to international trade instruments at a time when trade has a significant role to play in the country's economic recovery.

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