Exclusive: IFC to extend up to $500m trade financing facility to StanChart Bank

Photo: Reuters

International Finance Corporation, the private sector investment arm of World Bank, has approved an investment facility of up to $500 million in the trade finance programme of Standard Chartered Bank.

IFC’s facility comes at a time when global banks are retrenching from emerging markets. Its facility will enable Standard Chartered Bank’s to continue supporting businesses in emerging markets in Africa, Asia, and Middle East.

Standard Chartered, which is listed on the London, Hong Kong and Mumbai stock exchanges, counts Temasek Holdings, Aberdeen Asset Management PLC’s fund management operating subsidiaries, and Dodge & Cox as its key investors.  Though it is headquartered in London, the company has offices in 71 countries, with its Trade Risk Distribution and Operations being managed out of its Singapore hub.

The proposed project, GTLP SCB III, falls under IFC’s Global Trade Liquidity Program (GTLP), a trade finance programme launched in 2009.

“The GTLP SCB III project is a renewal of the existing GTLP SCB Extn, which followed the original GTLP SCB transaction,” IFC said in a disclosure.

“GTLP SCB III is a funded risk-sharing facility of up to $1.0 billion, with an IFC investment of up to $500 million in a portfolio of trade finance assets,” it added.

IFC had launched its GTLP initiative to stimulate private sector trade finance across a wide array of developing and emerging economies by providing funding for trade finance transactions through regional banks. The programme provides liquidity or guarantees thereby helping banks grow their credit limits, manage risk and support trade in emerging markets.

The project is likely to help increase access to finance for emerging market importers and exporters. Improved availability of credit will in turn benefit local enterprises along the value chain and, therefore, support growth, sustain employment and encourage the generation of higher incomes, according to IFC.

“IFC’s additionality is also enhanced by engaging mobilisation partners, which will allow SCB to maintain or expand trade credit in emerging market countries. SCB’s ability to successfully implement its strategy and grow its trade finance market share in emerging markets at this volatile time through the GTLP SCB III facility will underscore IFC’s counter-cyclical role,” the investment firm said.

Standard Chartered is a global bank with an emerging market focus. The group earns around 90 per cent of its income and profits in emerging markets, in Asia, Africa and the Middle East, from its wholesale and consumer banking businesses. As of December 31, 2015, the Bank had total assets of $640 billion, and total equity of $49 billion.

The project will show other market participants the strength of an IFC partnership with a major international bank and program partners to support trade finance globally. “It will have a strong demonstration effect by encouraging greater local/regional bank participation in emerging markets trade finance, thereby increasing access to such type of financing for local importers and exporters,” IFC said.

Also Read:

IFC commits $200m to Emerging Asia Fund

Temasek-backed Standard Chartered seeking to sell $4.4b of assets in Asia

Why you should attend DEALSTREETASIA’s Private Equity-Venture Capital Summit 2016

 

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.