Commerzbank has published the latest edition of FI.News, the bank’s newsletter for financial institutions. Featuring various in-depth articles and interviews, the biannual newsletter collects Commerzbank’s latest insights on the challenges and opportunities that lie ahead for financial services in today’s transformational times.
Financial institutions are understandably operating in challenging circumstances. Yet this edition of FI.News keeps its gaze firmly ahead – exploring the ways that the current situation could be a catalyst for change in a number of areas, including digitalisation, trade finance, African trade and sustainable finance. The newsletter also provides latest news stories and internal updates from the Commerzbank Institutionals division.
Moorgate has produced FI.News since 2013. The latest edition may be found here.
Africa-EU trade relations have long been critical: the EU is Africa’s largest trade partner and this inter-continental trade barrier will be crucial to spur both region’s post-pandemic recovery.
Writing for Financier Worldwide, Jeff Fallon, head of client coverage at BACB, claims that despite likely changes to risk appetite for supporting this trade corridor, it would be short-sighted to let Europe-Africa collaboration fall behind.
Fallon writes: “Maintaining connections between Europe and Africa will be vital to economic recovery, and specialist banking partners that remain committed to Africa are on hand to help navigate the process.”
Read the full article here.
As the appetite for foreign direct investment (FDI) in Africa intensifies, currency illiquidity and volatility stand as potential barriers to growth. In an article for The Global Treasurer, David Bee, Head of Global Markets at Crown Agents Bank, explores how new, innovative technologies – such as EMpowerFX – can begin to offset Africa’s currency concerns.
Please click here to read the full article.
In an article for African Review, Doina Buruiana, Project Manager at the ICC Banking Commission, discusses the drivers behind the unmet demand for trade finance, which is estimated to stand between US$110bn and US$120bn in Africa.
Buruiana explains that although banks in Africa are providing increasing amounts of trade finance, obstacles remain in the way of growth, namely those of regulation and compliance.
To read the full article on pages 20-21 of African Review’s July edition, click here.
Ethiopia and Kenya are doing much to bring the region closer together, according to Commerzbank’s Regional Head of Africa. Read more on page 16 of the new issue.
The countries of East Africa – led by Kenya and Ethiopia – need to integrate. In an article for Banker Africa, Commerzbank’s regional head argues that they can do so by investing in transport, energy and customs infrastructure.
The problem of unfinanced trade is nothing new in Africa. In an article for Euromoney, Duarte Pedreira, Head of Trade Finance at Crown Agents Bank, warns that the “real issue” underlying the African trade finance gap is that “Banks are moving more and more towards financing the same counterparties, which is creating concentration risk. Whilst banks don’t want to lend to African commodity producers or importers, they happily lend to large commodity traders, who then undertake the lending to these entities themselves.”
Yet the outlook for trade is “far from uniformly bleak”. In emerging markets, “niche players are stepping into the void created by de-risking among large banks by supporting due diligence-led financing in countries ranging – in the case of Crown Agents Bank – from Sierra Leone and Gambia to Malawi and Mozambique.”
Africa continues to show promise and is growing in importance as a market for corporates in Europe. But while positive demographics and strong growth rates are generating strong opportunities, corporates and their banking partners still face considerable challenges in Africa due to the continent’s cultural diversity and its regulatory and political inconsistencies. Christian Nägele, Head of Sub-Saharan Africa Region at UniCredit, explains in Global Banking & Finance Review how a bespoke approach to international trade is required.
To read the full article go here, or turn to page 106 here.
African currencies have undergone tremendous volatility over the past year, with significant depreciations – as well as some surprise recoveries – making headlines. In an article for GTNews, Crown Agents Bank’s deputy treasurer, Theresa Henshaw, explains that the background to such instability has been equally fickle raw material prices. These have dampened growth and put pressure on exchange rates in Africa’s commodity export-dependent economies.
In the article, “The African currency rollercoaster ride”, Henshaw notes that currency volatility creates real headaches for central banks across the continent. In addition to dealing with fiscal deficits and the prospect of increased external debt obligations, central banks must now grapple with the adverse effects of rising inflation: imports have become more expensive, and crucial foreign exchange reserves have diminished.
For companies looking to operate in Africa, the shifting foreign exchange landscape offers no less of a challenge. Treasurers could find themselves with increased expenses for their cross-border trade and day-to-day operations, as well as uncertain outlooks for their African investments. Henshaw shows that while some may prefer to stick to those “safe-haven” countries still enjoying relative currency stability, those treasurers that can count on a banking partner with in-depth knowledge of local markets and the ability to manage foreign-exchange risk will be best placed to deal with volatility in the future.
Read the article here.
Crown Agents Bank has added two new Vice Presidents to its trade finance department.
Kenton Hartwell brings 25 years of trade finance experience to Crown Agents Bank, and will focus on originating trade finance from exporters/beneficiaries and from the secondary market. He most recently held senior positions in the structured trade & commodity finance department of Standard Bank, spending almost 20 years working with commodities and across the trade finance spectrum, particularly in African markets.
Yasmine Thiam will specialise in facilitating trade business for banks in West African and Caribbean markets. She joins from the global trade finance commodity desk at Bank ABC, where she was a relationship manager for customers in the Middle East and North Africa. Prior to that, she spent four years working in the structured trade commodity finance department of FBN Bank (UK) Ltd.
News of the hires was reported in Trade & Export Finance, Global Trade Review, Trade Finance, Trade & Forfaiting Review and Banker Africa.