Download - RZB-TF Workshop-OFID (1)
-
8/6/2019 RZB-TF Workshop-OFID (1)
1/42
RZBs Trade Finance businessactivities
with a focus on CEE and CISMarch 2008
-
8/6/2019 RZB-TF Workshop-OFID (1)
2/42
OPEC-Fund Trade Finance Workshop Slide 2
The Structure
Interests in Austrian
Financial Institutions
8 Raiffeisen Landesbanks
566 Raiffeisen banks, operating 2,300 branches in Austria
RZB Group
Raiffeisen Banking
Group
TOTAL ASSETS: EUR205,361mn
PROFIT BEFORE TAX: EUR 1,697mn
Tier 1: 7.4%RegulatoryOwn Funds: 10.1%
Foreign Branches, Offices
and Equity Participations
Central and Eastern
European Network BanksSpecialist Companies
100%
87.7%*
RZB
Raiffeisen International
-
8/6/2019 RZB-TF Workshop-OFID (1)
3/42
OPEC-Fund Trade Finance Workshop Slide 3
Long term regional experience and wellpositioned in CEE and CIS markets
North America
Asia
Banks
Representative Offices
Branches
Beijing Ho Chi Minh City Hong Kong Mumbai Seoul Singapore Zhuhai Teheran
Chicago Houston New York Los Angeles
-
8/6/2019 RZB-TF Workshop-OFID (1)
4/42
OPEC-Fund Trade Finance Workshop Slide 4
RZB Group Key financial data
- Solidarity among Raiffeisen banks underpinned by acomprehensive protection scheme
- Strong market position and well diversified operations inCentral & Eastern Europe
- Sound financial and risk profile of RZB- Sound financial profile and defensible domestic franchise
of the Austrian Raiffeisen banks
A-1
(stable)
A+
(stable)
N/A
- Central position within the strongly cohesive Austrianco-operative banking sector
- Stable funding base- Stable domestic market position in corporate banking
alongside well developed franchise in several CEEcountries
- Profitable wholesale banking franchise in CEE
Stable funding base
P-1
(stable)
Aa2
(stable)
C
(stable)
Credit StrengthsShort-Term
Credit Rating
Long-Term
Credit Rating
Bank Financial
StrengthAgency
Rating Data
-
8/6/2019 RZB-TF Workshop-OFID (1)
5/42
OPEC-Fund Trade Finance Workshop Slide 5
RZB Group Key financial data
* including one-off effects such as the sale of Raiffeisen Bank Ukraine and 10% of BankTuranAlem
in EURmn 2006* 2006 H12006 H12007 Change H107/06
Balance-sheet total 115,629 115,629 103,189 126,057 22.2%
Profit before tax 1,882 1,286 643 846 46.1%
RoE before tax 39.1% 26.7% 24.2% 25.5% 1.3 PP
Tier 1 ratio (banking book) 9.0% 9.0% 7.2% 8.1% 0.9 PP
Total capital ratio 10.8% 10.8% 9.1% 10.1% 1.0 PP
Cost/Income ratio 56.7% 56.7% 53.9% 55.3% 1.4 PP
Key figures overview
-
8/6/2019 RZB-TF Workshop-OFID (1)
6/42
OPEC-Fund Trade Finance Workshop Slide 6
Award winning Service Quality
In addition, the following Network Banks of the RZB Group have been awarded "Best Bank" in
their respective countries by international publications:
Albania, Bosnia and Herzegovina, Hungary, Kosovo, Serbia, Slovakia and Ukraine
Best Treasury and Cash Management Provider Global Finance
Best Bank in Centraland Eastern Europe Euromoney, Global Finance
Best Bank /Risk Management in CEE Treasury Management International
Bank of the Year in Austria The Banker
Best Bank in Austria Global Finance
-
8/6/2019 RZB-TF Workshop-OFID (1)
7/42
OPEC-Fund Trade Finance Workshop Slide 7
RZBs Trade Finance products overview
Irrevocable letter of credit
Letter of guarantee
Standby letter of credit
Pre-export financing
Post-shipment financing
Warehouse financing
Commodity and structured trade finance
Export finance (ECA)
Receivables purchase
Discounting of promissory notes
Forfaiting
-
8/6/2019 RZB-TF Workshop-OFID (1)
8/42
OPEC-Fund Trade Finance Workshop Slide 8
Commodity & Structured Trade Finance
Close controlof the commodity
flow
Close controlof the payment flow
Commodity and Structured Trade Finance refers to structured short-
term lending to finance the production, the purchase, the storage, the
transportation of exchange-traded commodities, where the loan willbe
repaid from the proceeds of the sale of the commodity to pre-agreed off-
takers with a
Mission
-
8/6/2019 RZB-TF Workshop-OFID (1)
9/42
OPEC-Fund Trade Finance Workshop Slide 9
Commodity & Structured Trade Finance
Commodity producers in emerging markets
(e.g. oil, metal ores,)
Processing plants in emerging markets
(e.g. refineries, steel plants)
International trading companies
Often, balance sheet lending is not possible, therefore
we need to structure our financings!!
Customers
-
8/6/2019 RZB-TF Workshop-OFID (1)
10/42
OPEC-Fund Trade Finance Workshop Slide 10
Crude oil & oil products (accounting for ~ 60% of
results) Ferrous & non ferrous metals
Fertilizers
Others (e.g. chemicals, agricultural products)
Commodity & Structured Trade Finance
Products/Commodities
-
8/6/2019 RZB-TF Workshop-OFID (1)
11/42
OPEC-Fund Trade Finance Workshop Slide 11
Commodity & Structured Trade Finance
Russian Federation
Ukraine
Belarus
Central Asian Republics of FSU(e.g. Kazakhstan, Uzbekistan)
Romania
Bulgaria
Countries of former Yugoslavia
Countries
-
8/6/2019 RZB-TF Workshop-OFID (1)
12/42
OPEC-Fund Trade Finance Workshop Slide 12
Commodity & Structured Trade Finance
Pre-export Financing
Production & Tolling Financing
Storage Financing
Transport Financing
Post-shipment Financing
Transaction Types
-
8/6/2019 RZB-TF Workshop-OFID (1)
13/42
OPEC-Fund Trade Finance Workshop Slide 13
Commodity & Structured Trade Finance
1. Export L/C in
favour of trader
Supply
contract
RZB
Final OfftakerTrader
RZBs customerSupplier
Collection
account
of the Trader
with RZB
Sales contract,
assignment to
RZB
Offtakers
bank
Pledge of collection
account to RZB
Suppliers
bank
2. Import L/C in
favour of
supplier
3. Delivery3. Delivery
4. Payment under the
Export L/C
4. Payment under
the Import L/C
L/C facility structure
-
8/6/2019 RZB-TF Workshop-OFID (1)
14/42
OPEC-Fund Trade Finance Workshop Slide 14
Commodity & Structured Trade Finance
2. Delivery
of
crude oil
3. Delivery
of
crude oil
4. Payment to the
collection account
Final Offtaker TraderSupplier
RZBs customer
RZB
1. Disbursement
Value ofloan to the
Supplier = max. 80%
of the value of crude
oildelivery !
Collection
account
of the Trader
with RZB
Pledge of collectionaccount to RZB
Loan agreement
Supply contract,
assignment to RZB
Sales contract,
assignment to RZB
5. Repay-
ment
6. Release
of cash
cover
Pre-export financing structure
-
8/6/2019 RZB-TF Workshop-OFID (1)
15/42
OPEC-Fund Trade Finance Workshop Slide 15
Production plan of producer
Dispatch notice Railway bills
Forwarder certificate of receipt
Warehouse receipt
Bill of Lading
DAA (documentary acceptance act) in case of crude oilfinancing (via pipeline)
Commodity & Structured Trade Finance
Control of product flow, proof of existence of the goods
-
8/6/2019 RZB-TF Workshop-OFID (1)
16/42
OPEC-Fund Trade Finance Workshop Slide 16
Financing not for 100%, mitigation of price risk in caseof pre-export financing structure
Payment to be effected by the final off-taker to thecollection account with RZB
Notice of assignment and acknowledgement ofassignment from Off-taker
Commodity & Structured Trade Finance
Control of payment flow
-
8/6/2019 RZB-TF Workshop-OFID (1)
17/42
OPEC-Fund Trade Finance Workshop Slide 17
Product experience
Market experience Track record
Strategic partner of producer
Any control over the producer
Strategic partner of the final off-taker
Assessing the trader
Commodity & Structured Trade Finance
-
8/6/2019 RZB-TF Workshop-OFID (1)
18/42
OPEC-Fund Trade Finance Workshop Slide 18
Payment risk
Off-takers pre-approved by RZB in case ofpayment on open account
All other off-takers have to opendocumentary L/Cs in favour of our customer
Notice of assignment, acknowledgement ofassignment
Export off-taker vs. domestic off-taker
Long term relationship vs. spot
Commodity & Structured Trade Finance
Assessing the Off-taker
-
8/6/2019 RZB-TF Workshop-OFID (1)
19/42
OPEC-Fund Trade Finance Workshop Slide 19
Supply contract
Sales contract
Performance undertaking/ Surety of supplier
Purchase confirmation, documentary L/Cs
Invoice of supplier to RZBs customer
Invoice of RZBs customer to the off-taker
Transportation documents
Documents involved
Commodity & Structured Trade Finance
-
8/6/2019 RZB-TF Workshop-OFID (1)
20/42
OPEC-Fund Trade Finance Workshop Slide 20
Commodity & Structured Trade Finance
politicalrisk
payment risk
fraud risk contractualrisks
performance risk
quantity and quality
risk handling risk
transportation risk
market risk
price and FX risks
Generalrisks
risks for
Producer/Exporter
Trader
(Buyer/Seller)
FinalBuyer
Risk overview
-
8/6/2019 RZB-TF Workshop-OFID (1)
21/42
OPEC-Fund Trade Finance Workshop Slide 21
Pledge on Goods
Assignment of supply contract and sales contract
A certain percentage of cash cover (10-30%)
Payment instruments from off-takers issued by 1st class banks(L/Cs, Standby-L/Cs, Guarantees)
Payment undertakings or purchase confirmations from first classoff-takers
Assignment of receivables (assignment of proceeds of Letters ofCredit, Bank Guarantees, Sales Contracts, PaymentUndertakings, Purchase Confirmations)
Commodity & Structured Trade Finance
Possible securities (combination!)
-
8/6/2019 RZB-TF Workshop-OFID (1)
22/42
OPEC-Fund Trade Finance Workshop Slide 22
Pledge on collection accounts
Mortgage on borrowers real estate (real estate register!) Careful selection of and close co-operation with
Commodity & Structured Trade Finance
Freight forwarders
Insurance companies
Inspection and surveillancecompanies
Warehouse keepers
Possible securities (combination!)
-
8/6/2019 RZB-TF Workshop-OFID (1)
23/42
OPEC-Fund Trade Finance Workshop Slide 23
Syndication of the loan
Assignment of claims against insurance companies (RZB beingnamed as loss-payee)
Insurance of payment risk of off-takers
Commodity & Structured Trade Finance
Possible securities (combination!)
-
8/6/2019 RZB-TF Workshop-OFID (1)
24/42
OPEC-Fund Trade Finance Workshop Slide 24
Commodity & Structured Trade Finance
What you always wanted to know about....Commodity and Structured Trade Finance
... but never dared to ask!
Trends
-
8/6/2019 RZB-TF Workshop-OFID (1)
25/42
OPEC-Fund Trade Finance Workshop Slide 25
Competence and know-how:
Competence of top leveland decades of experience
Tailor-made export finance services:
The key to successfulcross-border business is a reliable associate
who thinks globally but acts locally
Comprehensive support:
Consulting and supporting RZBs customers concerning all issues in
respect
of export insurance and export finance
Export Finance
Mission
-
8/6/2019 RZB-TF Workshop-OFID (1)
26/42
OPEC-Fund Trade Finance Workshop Slide 26
Multi-Sourcing Transaction with ECA
Corporate Ukraine
Raiffeisen Bank Aval15% Down payment financing
Local cost financingSelf retention
L/C opening bank
Exporter
Austria
Sub-supplier
Germany
Vienna
OeKB
AustriaCOFACE
France
Loan agreement85% of contract value + up to 100% ofECA costs ECA Facility
EulerHermes
GuaranteeFinance credit cover
Re-insurance Parallel insurance
Delivery100% of contract
value
Delivery100% of contract
value
Loan agreementCommercial Loan
* Manufacturing riskcover
**
Sample multi-
sourcing transaction
with ECA
Exporter
France
-
8/6/2019 RZB-TF Workshop-OFID (1)
27/42
OPEC-Fund Trade Finance Workshop Slide 27
Long-term financings for clients of our Romanian
Network bank in cooperation with/based on
guarantees issued by the Norwegian ECA (GIEK)
and by the Canadian ECA (EDC) and COFACE
(France).*
EUR 8,4 mio. Renault TK Axis Deal Leasing
Transaction, Russia
EUR 108 mio. Export Project Financing of a cellulose
factory in Estonia._________________
*) due to bank secrecy we are not permitted to publish the name of the
companies without prior written approval
Examples for SuccessfulExport Financing
-
8/6/2019 RZB-TF Workshop-OFID (1)
28/42
OPEC-Fund Trade Finance Workshop Slide 28
Finalized Transactions with international ECAs within
Cooperation withInternational ECAs
We are currently also in contact with Sinosure (China), EKF
(Denmark), IFTRIC (Israel), NEXI (Japan), KEIC (Korea), IGA
(Serbia), CESCE (Spain) , SERV (Switzerland), ECGD (U.K.)
-
8/6/2019 RZB-TF Workshop-OFID (1)
29/42
OPEC-Fund Trade Finance Workshop Slide 29
The Global Export Finance Department, Vienna
has an outstanding Export Credit Portfolio
totalling approx. EUR 6 billion
as of December 2007
has finalized export financing transactions
in the volume of
EUR 3 billion in the year 2007
with various ECAs
Export Finance
-
8/6/2019 RZB-TF Workshop-OFID (1)
30/42
OPEC-Fund Trade Finance Workshop Slide 30
Export insurance
Export finance
Our Responsibilities
ECA-Multisourcing Center of Competence for
International ECAs with the exception of US-Exim
which is handled directly by RZB Finance LLC, New York, USA.
Network Banks Export Finance for deliveries and services originating(NWB) from the CEE countries is offered directly by our experts in the
respective Network banks (= NWB), e.g. Raiffeisen banks in Poland,
Hungary, Czech Republic, Croatia, Romania and Tatra banka in
Slovakia.
under the Austrian Export
Promotion Scheme
-
8/6/2019 RZB-TF Workshop-OFID (1)
31/42
OPEC-Fund Trade Finance Workshop Slide 31
RISK SHARING EXPERIENCE/SYNDICATIONS
RISK SHARING EXPERIENCE / SYNDICATIONS
OPEC-Fund Trade Finance Workshop
Seite 31
-
8/6/2019 RZB-TF Workshop-OFID (1)
32/42
OPEC-Fund Trade Finance Workshop Slide 32
Trade Finance ProductsKind of Participations used in RZB
L/Cs, bank guarantees and payment undertakings issued by banks
Negotiable instruments guaranteed by a bank as avalised bills of
exchange and promissory notes
Trade related pre- or post-financings to banks
-
8/6/2019 RZB-TF Workshop-OFID (1)
33/42
OPEC-Fund Trade Finance Workshop Slide 33
Syndication Techniques
Risk Participations
Searching forP
articipants in short-mid term trade related primarytransactions offered to other institutions on an undisclosed and
usually unfunded basis
Forfaiting
100% without recourse selling of trade related short and middle term
transactions to other institutions or primary markets on a disclosed
and funded basis
-
8/6/2019 RZB-TF Workshop-OFID (1)
34/42
OPEC-Fund Trade Finance Workshop Slide 34
Participation under L/CKind of Participations used in RZB
FundedRisk Participations (not very common under L/CS)
Settlement Limit
KYC check
UnfundedRisk Participations
Settlement limit
CounterParty Limit
KYC check
Agreements used with:
External Banks: Master Risk Participation
Participation according to Austrian Law
IFA (International Forfaiting Association) Guide lines
Frankfurter Agreement
-
8/6/2019 RZB-TF Workshop-OFID (1)
35/42
OPEC-Fund Trade Finance Workshop Slide 35
Participation underTrade Finance Products
Pre-conditions for risk participations under L/Cs
L/C has to be confirmed by RZB
Following terms and conditions to be met: L/C available by sight payment or deferred payment
with or without post financing
valid for presentation of documents at the counters of RZB
payable at the counters of RZB
include order for confirmation
acceptable L/C wording
-
8/6/2019 RZB-TF Workshop-OFID (1)
36/42
OPEC-Fund Trade Finance Workshop Slide 36
Participation underTrade Finance
Confidentiality of data: especially with L/Cs
Written consent from issuing bank that RZB Vienna is allowed to
pass on data to third parties regarding the L/C under the riskparticipation. (Due to Austrian Banking Law)
In case it is not possible to get this agreement from issuing bank, FI
management has to authorize syndication department to proceed
without such letter under full responsibility of FI.
-
8/6/2019 RZB-TF Workshop-OFID (1)
37/42
OPEC-Fund Trade Finance Workshop Slide 37
Main Drivers for Risk Participations
Advantages:
Reduction of exposure to particular names, sectors or countries
presents new reciprocity opportunities Increase in capacity to lend to particular entities/countries
Diversification of risk and acquisition of target exposures where
appropriate
Additional income generation
A market oriented capital allocation Building up international market expertise
Optimising equity allocation within the group
Broadening of the investor base
-
8/6/2019 RZB-TF Workshop-OFID (1)
38/42
OPEC-Fund Trade Finance Workshop Slide 38
Source: Dealogic
Syndicated Trade Finance
Volumes in CEE-CIS (2003-2007)
7.653,46 7.827,47
16.380,54
31.575,79
12.832,75
87
123
87
181207
0,00
5.000,00
10.000,00
15.000,00
20.000,00
25.000,00
30.000,00
35.000,00
2003 2004 2005 2006 2007
0
50
100
150
200
250
Vo ume
No o Dea
-
8/6/2019 RZB-TF Workshop-OFID (1)
39/42
OPEC-Fund Trade Finance Workshop Slide 39
Trade Finance InvestorsGeographicalDistribution
Russia/CIS-CEE region
attracting
Trade Finance investors
Many small investors gettinglimits for trade related risks
to invest
Borrowers keen to diversify
lending group
Trade Finance Investors:
EUROPE
ASIA
GCC
-
8/6/2019 RZB-TF Workshop-OFID (1)
40/42
OPEC-Fund Trade Finance Workshop Slide 40
Trade Finance Market Trends
Market Trends:
Although Trade Finance volumes diminished in 2007, we expect volumesto increase in 2008 upwards due to market conditions (liquidity);
Exporters- Importers willuse:
Less open accounts Less Documentary collections
Less cash payments
CEE-CIS Banks will use Trade finance products for their own fundingneeds,(Sight L/Cs with Post Financing)
Strong competition among Banks, Insurance companies and ECAs
Due to the complexity of the Structured Trade Finance Products,corporates used to borrow through projects finance or corporate financesyndicated markets. 2008 and upwards, we expect this trend to bechanged.
-
8/6/2019 RZB-TF Workshop-OFID (1)
41/42
OPEC-Fund Trade Finance Workshop Slide 41
RZB expects from potentialPartners
Regional Expertise
Risk taking Capacity
Product knowledge
Master Risk Participation in place
Funding
-
8/6/2019 RZB-TF Workshop-OFID (1)
42/42
OPEC-Fund Trade Finance Workshop Slide 42
Thank you for your attention!