Global Finance editors, with input from industry analysts, corporate executives and technology experts selected the best trade finance banks in 97 countries and eight regions.
In addition, Global Finance selected the best banks for trade by U.S. region, a list that was based on various service categories, such as document management and export finance.
This year’s winners were revealed during Global Finance’s 20th annual World’s Best Trade Finance Providers awards luncheon on Jan. 15 in Frankfurt, Germany, during the BAFT Global Annual Meeting.
The American winners were:
New England: Webster Bank
Mid-Atlantic: M&T Bank
Great Lakes: KeyCorp
Plains: Commerce Bank
Southeast: SunTrust Bank
Southwest: Comerica
Rocky Mountains: Zions Bancorp
Far West: U.S. Bancorp
Globally, HSBC took the top spot in Euromoney’s Trade Finance Survey for the third year running, with Deutsche Bank in second place and UniCredit in third. Citi fell out of the top three to take fourth position. One of the biggest upsets was JPMorgan, which fell to 17th after reaching ninth place in 2018.
“Many of the American banks have enough trade business in their home market,” explains Eric Li, research director at Coalition. “So it’s no surprise that when it comes to a global survey, European banks will thrive.”
Global Finance editors say the winners are those banks and providers that best serve the specialized needs of corporations as they engage in cross-border trade. The winners are not always the biggest institutions, but rather the best—those with qualities that companies should look for when choosing a provider.
A proprietary algorithm with criteria—such as knowledge of local conditions and customer needs, financial strength and safety, strategic relationships and governance, competitive pricing, capital investment and innovation in products and services—weighted for relative importance was employed by Global Finance.
A DIFFERENT TAKE FROM GREENWICH ASSOCIATES
As of press time, the most recent Greenwich Share and Quality Leaders in U.S. Large Corporate Banking was released during the fourth quarter of 2019.
“For a business that is generally considered stable and rather slow to evolve, large corporate banking is changing fast,” notes a statement from Greenwich Associates. “The globalization of U.S. corporate business coupled with a disruptive trade war, the proliferation of digital technology, the rise of fintech providers, and the strategic retreat of certain global banks are just some of the variables shaking up the corporate banking industry and putting more corporate clients and business up for grabs.”
From April through September 2019, Greenwich Associates conducted interviews at U.S.-based companies with $2 billion or more in annual revenue with 422 chief financial officers, treasurers and assistant treasurers, 441 cash managers and other financial professionals in cash management, and 136 corporate trade finance professionals.
Participants were asked about market trends and their relationships with their banks. Trade finance interview topics included product demand, quality of coverage and capabilities in specific product areas.
THE WINNER’S CIRCLE
The 2019 share list is topped by J.P. Morgan, followed by Bank of America, Wells Fargo, Citi and HSBC—in that order.
The order of the top two changes when it comes to U.S. Large Corporate Cash Management: Bank of America; J.P. Morgan; Wells Fargo; Citi; and HSBC.
“Despite the trade war between the United States and China, the ongoing Brexit saga and other signs suggesting that globalization might have temporarily peaked, U.S. companies actually increased their exposure to overseas markets last year—at least in terms of their banking needs,” according to Greenwich. “For example, the share of large U.S. companies using at least one bank for payments/receivables and/or cash management in Western Europe increased to approximately two-thirds in 2019 from just 58 percent in 2018. The uptick was equally impressive in Latin America, Central and Eastern Europe, and the Middle East and Africa.”
BANKS CHARGE INTO CASH MANAGEMENT
The biggest U.S. banks are placing a new strategic focus on the cash management business. In part, this new emphasis comes from a desire to capture the cash deposits of large companies, which provide a much-needed source of balance sheet stability.
However, banks are also looking to capitalize on an inefficiency in corporate treasury management by creating new client values. International payments, receivables transactions and even corporate cash transfers often trigger a corresponding foreign exchange trade. Some companies put those trades out to bid—but many don’t.
Even for trades up to $20 million in size, many companies simply pass the trade on to their cash management providers. For that reason, margins for FX transactions on the back-end of international cash management transactions can be especially attractive.
U.S. TRADE FINANCE AMONG LARGE CORPORATES
Trade finance is an area of renewed interest by the major banks. Citi, Bank of America and J.P. Morgan all vie aggressively to be the lead trade finance provider among U.S. large corporates, with each bank doing business with just under half of the market. Wells Fargo and HSBC round out the top five banks. Bank of America, Citi, HSBC, J.P. Morgan, and Wells Fargo are all recognized for distinctive quality and share the title of Greenwich Quality Leader.
GREENWICH EXCELLENCE AWARDS
The accompanying table presents the complete list of 2019 Greenwich Excellence Awards in U.S. Large Corporate Banking and Cash Management.
Greenwich consultants John Colon, Don Raftery and Chris McDonnell specialize in corporate banking, cash management and trade finance services in North America. Consultant Chris McDonnell also specializes in digital banking.