|
EBRD and Sberbank sign Trade Finance Guarantee Facility Agreement
To support the development of foreign trade in Russia, the European Bank for Reconstruction and Development (EBRD) and Savings Bank of the Russian Federation (Sberbank) have signed a Trade Finance Guarantee Facility Agreement. Under the facility, which was approved as part of the EBRD’s new Regional Trade Facilitation Programme, the Bank will guarantee trade finance instruments (such as letters of credit) issued by Sberbank on behalf of its Russian clients in favour of Western commercial banks. The amount of the facility will initially be US$ 20 million and may be increased by mutual agreement.
"The development of foreign trade is an important factor in the transition to a market economy," said EBRD First Vice President Charles Frank, who signed today’s agreement. "The EBRD’s Trade Facilitation Programme is designed to help banks in central and eastern Europe and the CIS improve their access to foreign trade credit, and thereby promote their customers’ export-import business and financial intermediation. Sberbank’s role in the Russian banking sector and its wide regional branch network will allow it to extend the programme to many more private businesses. This facility is a key step towards restoring the confidence of foreign banks in financing foreign trade operations in the CIS," he added.
The Regional Trade Facilitation Programme was launched in 1999 and covers all of the EBRD’s countries of operations. It allows local participating, or issuing, banks to obtain EBRD guarantees for up to 100 per cent of the value of their trade finance instruments. EBRD guarantees cover both the commercial risk of the local bank and the political, or transfer, risk associated with the country. An EBRD guarantee allows issuing banks to obtain confirmation or re-financing of their trade finance instruments by Western confirming banks without depositing cash collateral.
At present, 26 local banks from the EBRD’s countries of operations are eligible for EBRD guarantees as issuing banks, and over 80 foreign banks participate as confirming banks. In Russia, two banks (Vneshtorgbank and Sberbank) operate as issuing banks. This year the list of accredited local banks is expected to expand further to include more banks in Russia, Ukraine and the Balkan countries.
Sberbank of Russia was founded in 1841 and in 1991 became the successor to the Russian part of Sberbank of the Soviet Union. It remains the largest bank in the country and operates through approximately 30,000 branches and agencies, providing by far the strongest regional coverage of any bank in Russia. The bank is partially privately owned and has significantly expanded its corporate banking business in addition to its very strong retail franchise.
|
