The East-West United Bank (part of PJSFC Sistema Group), registered in Luxembourg, launches a new product - Documentary operations. From July 2019, bank customers can use Letters of Credit, Bank Guarantees and Documentary Collections in settlements with their partners. Thus, East-West United Bank (EWUB) expands its product line and offers its customers additional opportunities in international payments.
Integrating Documentary Operations into the standard bank product line is the first phase of the EWUB project to enter the Trade Finance market. The bank is focused on the development of services for exporters and importers, traders and international trading companies. The next step in the plans of East-West United Bank is the financing of such companies and their trading activities.
“Documentary operations are the convenient tool as they combine settlement, guarantee and credit functions. Most often, they are used in settlements in cross-border trade, when trading partners are located in different countries, have different legal requirements and want to reduce credit and performance risks of their counterparties. We see an increased demand for these services from existing and potential customers. This is due to serious changes in the financial markets, which led to the restriction of trade finance services for small and medium-sized companies with which our bank works. ” - said Natalja Perhova, Director of trade finance at East-West United Bank.
According to various estimates, the international market for Trade Finance is growing at 3% per annum and has a relatively low-risk. At the same time, the market has a 1.5 trillion dollar financing shortage, which is associated with a decrease in the number of banks providing this type of service and a high level of refusals by banks to customers. The problem of rejections is most acute for small and medium-sized companies and companies from emerging markets that find it harder to comply with the compliance requirements from the banks. The latter choose to work with large clients from developed markets. All this creates a huge demand for these services, which the new EWUB product is aiming to satisfy.
“The launch of Documentary Operations and subsequently of full range Trade Finance services is being implemented within the framework of a five-year development strategy of the bank, aimed at increasing client base and improving quality of services. A wide range of banking products enables our clients to implement ambitious projects, and the bank - to increase commission income.” - said Sergey Pchelintsev, EWUB CEO.
The active participants in the Trade Finance market in Europe are the banks of Switzerland and the Netherlands. East-West United Bank will be one of the few banks in Luxembourg that provides trade finance services to its customers.
Press release by East-West United Bank
Publié le 01 juillet 2019