Trade finance revenue among banks remained steady in 2024, with notable growth in the Middle East and Brazil. European banks reported stable earnings, while some Asian lenders predicted opportunities from US trade disruptions. Overall, global trade finance response shows mixed resilience despite uncertainties in trade policies.
Last year, trade finance revenue from banks showed stability, with certain regions, particularly the Middle East and Brazil, witnessing growth despite concerns about the impact of US trade policies. A review of financial results from European and Asian banks from January to March indicated steady earnings or slight declines. European banks, while generally silent on trade details, exhibited a more optimistic outlook than the previous year.
Lenders in the Middle East and Brazil experienced robust performance in their trade finance sectors. Many banks issued warnings for a turbulent 2025 due to unpredictable trade tariffs and retaliatory measures, affecting importers and exporters globally. HSBC remarked that signs of world trade improvement were showing signs of faltering.
The World Trade Organization noted a positive trade performance late in 2024, yet anticipated challenges ahead due to potential shifts in trade policy. Some banks, particularly those in Asia, saw disruptions as opportunities for intra-regional trade. Singapore’s DBS and Standard Chartered aimed to capitalize on trade opportunities in North Asia and emerging markets amid this uncertainty.
Discrepancies exist in how banks report trade finance figures. Major banks often do not disclose trade-related earnings, which constrains the overall market outlook provided by such reviews. Larger US and European banks tend to report results later in the year, making it difficult for real-time analysis.
HSBC’s Global Trade Solutions division posted flat revenue, reaching $1.99 billion in 2024, up only 1% from 2023, owing to increased fee income and higher margins. Simultaneously, the final quarter of the year saw a surge of 10% in revenue, influenced by gains in Asia and the Middle East.
Standard Chartered reported a 2% decrease in trade and working capital income for 2024 at $1.27 billion, counterbalanced by advancements in intra-Asia trade. Meanwhile, Société Générale and BNP Paribas affirmed stable trade finance volumes.
In Italy, UniCredit achieved a 5% rise in fees from its trade-related operations, while Santander enjoyed strong performance in various trading sectors. Nordic banks like SEB reported high demand for trade finance products among large corporations, which translated to healthy fee income.
In Singapore, trade finance results varied, with DBS noting a 4% decline in trade income. UOB reported a remarkable 20% rise in trade loans. Hong Kong’s banks experienced declines in trade loan values while waiting for reports from Japan and India.
Middle Eastern banks like First Abu Dhabi Bank saw a 17% year-on-year increase in trade finance income, while Saudi banks also exhibited growth in fees and commission income. Al Rajhi Bank and the Saudi National Bank reported significant increases in LCs.
In Brazil, major lenders like Bradesco and Banco do Brasil continued an upward trajectory, with substantial increases in import letter of credits and export financing. In the US, Citi reported a 6% rise in revenue from trade solutions, driven by a sustained demand for trade and working capital loans.
The trade finance landscape in 2024 showed mixed results among global banks, with stability in Europe contrasted by growth in the Middle East and Brazil. Challenges from changing trade policies, particularly from the US, may impact trade dynamics moving forward. Certain banks are eyeing increased intra-regional opportunities, while discrepancies in reporting limit comprehensive assessments of the sector. Overall, banks are adapting strategies to thrive amid uncertainty, focusing on regions with growth potential.
Original Source: www.gtreview.com
