Sberbank Group trade finance deals reach some USD55 bn

Dec 29, 2020

Sberbank has unveiled its 2020 trade finance results. Year-to-date, the aggregate value of trade finance and documentary operations reached an unprecedented USD54.5 bn, while the volume of domestic transactions soared by 70% over the year.

Trade finance products are available in 18 countries where Sberbank Group has a footprint, and Group members have seen a threefold increase in the volume of transactions among each other. International deals utilizing trade finance instruments have been signed with companies and counterparties from more than 80 countries.

The Sberbank (Switzerland) AG subsidiary is developing Commodity Trade Finance (CTF) pro-actively. The volume of 2020 CTF deals has added 45% y-o-y, the supply of more than 20 million tons of goods has been financed, which included grain, petroleum products, metals, and fertilizers. CTF products enable customers to raise financing against the collateral of the exported goods and then repay loans using their proceeds.

For purposes of pre-export and investment financing while creating export-oriented production facilities, Sberbank has submitted applications worth RUB118 bn to Russian Export Center JSC, seeking to sign subsidies agreements.

Year-to-date, the bank has opened more than 200,000 escrow accounts, and their balance exceeded RUB630 bn, which is eight times the amount seen last year. The distance opening of letters of credit and escrow accounts, which integrated the bank’s environment with the internal systems of customers via SberAPI, has reduced the deal signing time from several days to a few seconds. More than 85% of escrow accounts are now being opened online.

The number of transactions using LOCs has more than doubled for small and micro-sized businesses, facilitated by the development of simple out-of-the-box solutions and the start of a training project on the Delovaya Sreda platform.

Individuals can now open letters of credit via the SberBank Online mobile application. The number of such transactions has doubled over the year, with LOCs being used to buy real estate, shares, stakes in businesses, art, pay for services, and so on.

As much as 100% of LOC transactions with corporate customers are also carried out electronically via the SberBusiness mobile application. The redesign and automation of the framework have cut the time for issuing LOCs to 10 minutes, letting users post payments on the same day.

2020 has been the year seeing further progress of Sberbank Group’s trade finance and documentary operations. We’ve improved our operations both quantitatively and qualitatively, cutting the time our services take several-fold, delivering them dozens and hundreds of times faster. We’ve also expanded the scale of our operations and the range of our offerings, which we make digital and seamless by default if this complies with legislation. These achievements have been appreciated by both our customers and industry experts: we won a Leaders in Trade 2020 award as Best Trade Finance Bank in Eastern Europe according to Global Trade Review, a leading international publisher in trade finance. This award recognizes top-performing financial institutions with a pioneering approach to deals and products.

Evgeny Kravchenko

Director of Trade Finance, Sberbank

AI transformation has opened up opportunities for using the bank’s big data to identify new niches in trade finance development. Machine learning methods are being applied to data on domestic and international transactions of customers. Unique in size for Russia, the data includes trillions of payments across dozens of billions of commercial business connections. Recommender systems based on this data result in better identification of customers’ needs in ensuring secure settlements with Russian and international letters of credit and financing trade deals.