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DBS ties with big boys in trade finance
DBS Bank's push in the trade finance business has clinched it a place among the global banks.
While HSBC continues to dominate across Asia in trade finance, in Singapore DBS has made it to the top three banks serving multinationals based here, according to the 2014 Greenwich Associates study released on Monday on Asian corporates use of trade finance.
HSBC, Standard Chartered Bank, Citi, Deutsche Bank and ANZ Bank are the top five leaders across Asia serving large corporates.
In Singapore, there is a three-way tie between HSBC, DBS Bank and Standard Chartered Bank, it said.
Across Asia, companies are utilising trade finance as a new source of capital and for process improvement in working capital management, Greenwich said.
"For the past several years, the leading trade finance providers in Asia had been losing market share to local providers with expansion ambitions and banks from Japan and elsewhere," it said.
These new competitors won client relationships largely on the basis of aggressive pricing.
"The strong and growing supply of new providers has resulted in a highly competitive market - much to the benefit of companies looking to utilise trade finance with high quality service and very low prices," says Greenwich Associates consultant Paul Tan.
When selecting a provider, companies are looking specifically for banks with robust international networks, with an emphasis on the fast-growing intra-Asian corridors, as opposed to inter-continental coverage.
At the top of this diverse market is HSBC. Forty-two per cent of large companies across Asia use HSBC for trade finance. Next is Standard Chartered Bank with a market penetration level of 36 per cent, followed by Citi at 31 per cent, and Deutsche Bank and ANZ Bank, which are tied at 27 per cent and 26 per cent, respectively. BNP Paribas ranks sixth.
"Over the past 12 months, ANZ Bank and BNP Paribas have gained notable visibility in Asian trade finance and are now emerging as significant alternatives to the regional incumbents," said Mr Tan.