CHAIRMAN'S MESSAGE - Sean Edwards, ITFA Chairman / Head of Legal at SMBC

Dear Members and Friends,

I write this message with a smile on my face after having returned from the ITFA conference in Edinburgh - the event captured all that ITFA represents - great content, substantive and relevant education, effective networking and building on great friendships, all enjoyed in a spectacular social setting. The opening presentation/video summed up all that ITFA encapsulates, highlighting a number of ITFA events and achievements throughout the year. Please allow me to thank the board members who have resigned from the board; Damian Austin and Anurag Chaudhary and give a warm welcome to the new comers; Khilola Turaeva and Duarte Pedreira. 

On behalf of the ITFA Board, I would like to take the opportunity to thank all those who attended our 44th Trade and Forfaiting Conference. Edinburgh proved to be a great conference destination with a record number of delegates attending this year’s conference. Moreover, this conference also attracted a great number sponsorship, demonstrating yet again, the vitality of our association and industry.

Those of you who attended the Conference Gala Dinner at the magnificent Hopetoun House will not have failed to have been moved by the speech Duarte made in memory of our friend and industry giant, Martin Ashurst who died of cancer in 2014. At the request of his widow, we have raised money for the diabetes charity, JDRF. Both of Martin’s sons have Type 1 Diabetes. I am pleased to say that we received around £2,000 in contributions from delegates, which ITFA will match pound for pound to make a total of £4,000, a fitting gift in memory of our much lamented friend. 

Please bear in mind that should you want to refer to the presentations that were delivered during the conference, these can be found in the member area of the ITFA website – click here. However, these are available to ITFA members only.

As an association our focus is on emerging market economies which have been benign and robust over the past 18 months or so. August, however, witnessed a marked and abrupt halt to  inflows. Investors yanked money out of emerging-market funds for the first time in months, a sign of trouble in what has been a durable segment of the global economy for much of the year. Risk aversion crept in as many global investors turned more cautious on risk. The shift in risk appetite came about as threats of nuclear warfare ramped up between the U.S. and North Korea.

More cheerfully, in the September edition of the ITFA Newsletter you will find an article about our annual conference in Edinburgh. ITFA is pleased to announce four new members – Arthur J. Gallagher (UK) Ltd, Chubb, Tokio Marine HCC and GII Capital Advisors Ltd. Our regular feature - Chart of the Month, contributed by Dr. Rebecca Harding of Equant Analytics looks at Trade Wars: Why the US must think before it acts. Finally, we update you on the Alternative ITFA which took place in London on 7^th September, the London Fringe to our Edinburgh main event.

We look forward to hearing from you with any feedback you may want to share with us by sending an email to myself, any of the Board Members or to our general email, info@itfa.org.  

Best wishes,

Sean Edwards

TARTAN FORFAITING - THE 2017 ITFA CONFERENCE IN EDINBURGH by Alexia Vella - ITFA, Head of Administration

In the first week of September, ITFA took over Edinburgh for its 44th Annual Conference. The association pulled out all the stops to make sure it was the best one yet! And from the feedback we have been receiving, it has most certainly fallen nothing short of outstanding in every sense:  great content, substantive and relevant education, effective networking and building on great friendships, all enjoyed in a spectacular social setting.

With over 220 delegates attending the ITFA conference, this event proved a high-point of the trade finance year. The ITFA team would like to thank all those who honoured us with their presence. Moreover, may we take the opportunity to thank all the conference sponsors who showed their trust in ITFA by supporting this great event - Swiss Re Corporate Solutions, Bank of China, Crown Agents Bank, UniCredit Bank, Wilben Trade, Sullivan & Worcester, Willis Towers Watson, Lloyds Bank and Codix.

ITFA events are interactive, innovative and idea-based. A delegate described his ITFA experience and explained that ‘’nothing beats being in the conference room at an ITFA event.’’ Below are some of the topics that were discussed during the three day conference.

After the conference opening by our chairman, Sean Edwards, an excellent presentation was made by Chief Economist, Jeremy Lawson of Standard Life on ‘Worlds Colliding - politics, economics and the impact of Brexit and Trump on Global Trade.’ Following this session, a great panel discussion ensued on a critical and very relevant issue - 'Digitising Receivables: the future is here now and it's going to get better' – moderated by Sean Edwards – ITFA; panel participants Kah Chye Tan - CCRManager, Glenn Kocher - LiquidX, Angus Scott - Euroclear and Richard Tynan - TradeIX. The day’s events ended with an update on the BAFT MRPA revision - Stacey Facter, BAFT and Paul Coles, ITFA.

The second day of the conference started with an extremely interesting presentation by Markus Sablatnig of Amcor detailing what a corporate treasurer requires from their trade finance providers. We then moved on to a very well attended panel discussion ‘Banking Africa - Doing it right.’ Highly experienced panellists discussed how to effectively transact in Africa, chaired by Duarte Pedreira - Crown Agents Bank, with panellists Louis du Plessis - First Rand Bank, Ian Henderson - Gulf International Bank, Alastair McLeod - Jardine Lloyd Thompson (JLT) and Christian Karam - Africa Trade Finance. During the last session of the morning, we had the pleasure of being addressed by Iain Kirkpatrick of PwC on the accounting framework which individuals from our industry have to deal with, with a focus on IFRS9.

This was followed by the ITFA AGM in which importantly, two new Board members were elected in addition to two existing members being returned to their positions. Please read the next article by Shannon Manders’s (GTR) on ITFA’s new executive Board Members and reshuffling of Board Member duties and responsibilities. As always, the networking event in the afternoon of Thursday the 7th September was very busy with individuals setting up as many as four meetings in an informal setting.

The final day of the conference started with a panel discussion from the ITFA Regional Chairs; Sophie Zhong Fei - Bank of China, Dieter von Boddien - Atlantic Forfaiting, Renato Schulman - Banco Finantia, Dalia Kay - Federated Investors (UK) LLP, Mag. Semih Ozcan MA - DenizBank AG and Waltraud Raderschall - Commerzbank AG, and moderated by Damian Austin - Bank ABC. Mag. Semih Ozcan MA included a special update on the impact of sanctions in Russia. The concluding session of the Conference saw Geoffrey Wynne - Sullivan & Worcester chairing a panel on 'Trade Finance insurance - credit risk mitigation,' looking to see how insurance compares to guarantees, risk participations, surety bonds and other risk sharing techniques. Introduced by Silja Calac - Swiss Re Corporate Solutions, other panellists were Irene Port - Unicredit Bank, Volker Handrich - Swiss Re Corporate Solutions, Huw Owen - Liberty Specialty Markets and Robert Nijhout - ICISA.

Sean Edwards closed the excellent 2017 conference by addressing all present and letting them know that we will be working on the organisation of the 2018 conference as from the very next day. See you all in Cape Town in 2018!

To view all the photos taken at this year’s conference, please visit the member area of the ITFA website or the ITFA Facebook page. We have uploaded lots of photos as evidence of the fantastic three days we spent together, in the company of great colleagues and friends. Also, since many of you were asking for a copy of the opening video of the conference, we thought it would be a good idea to also include it on the ITFA website - it can also be found in the Member Area section under ‘ITFA videos’. Enjoy!

ITFA NAMES NEW EXECUTIVE BOARD MEMBERS - Shannon Manders, GTR

The International Trade & Forfaiting Association (ITFA) has made changes to its executive board, including voting in new members, and reshuffling roles amongst existing members.

At the association’s annual conference in Edinburgh last week, two new board members were elected: Khilola Turaeva, from Bank of America Merrill Lynch, was voted in as head of institutional relations and Duarte Pedreira of Crown Agents Bank, will now head up ITFA’s young professionals network.

In other news, Lorna Pillow has taken up the position as the association’s new deputy chair, while retaining her role as head of communication and membership.

Outgoing board members are Damian Austin, from Bank ABC, who previously held the positions of deputy chairman and head of regions, and Anurag Chaudhary, formerly from Citi (but who has since left the bank), who was ITFA’s head of institutional relations.

The ITFA board now consists of the following individuals:

Sean Edwards, SMBC: chairman

Lorna Pillow, London Forfaiting Company Limited: deputy chairperson and head of communication and membership

Chris Hall, Lloyds Bank: head of regions

Silja Calac, Swiss Re Corporate Solutions: head of insurance relations and head of treasury

Duarte Pedreira, Crown Agents Bank: head of young professionals and responsible for setting up of an African Committee

Paul Coles, HSBC: head of market practice

Zeyno de Vries-Davutoglu, Credit Europe Bank: head of education

Jing (Jane) Li, Bank of China: head of Asian activities

Khilola Turaeva, Bank of America Merrill Lynch: head of institutional relations

Paolo Provera, former ITFA chairman, who retired from his role as general manager of the Milan branch of ABC International Bank in May last year, retains his position as honorary chairman.

CHART OF THE MONTH - Dr Rebecca Harding, Equant Analytics

Trade Wars: Why the US must think before it acts

There are times when it is helpful for a nation’s leaders to think carefully about the consequences of their statements. North Korea tested an H-bomb capable of being fitted to an Inter-continental ballistic missile on the 3^rd September. Without any exaggeration, this is a momentous time for the world’s security.

But this has also become a Trade War. On the 3^rd September, President Trump tweeted, “The United States is considering in addition to other options, stopping all trade with any other country doing business with North Korea.”

President Trump should be wary what he wishes for. Apart from China, North Korea’s top ten trade partners (imports and exports) include, Russia, India, the Philippines, Singapore, Chile, Germany, Hong Kong, Indonesia, Switzerland and Mexico. China itself exports around $US 2.8bn into North Korea and other countries are substantially smaller. Russia, for example, imports just $US 68m and India some $US 54m. For many other countries the amounts are in the low millions. However, if the President’s words are to be taken at face value, then all of these countries should be included. Taken together and including China, these countries accounted for nearly 48% of the US’s total trade of $US 3.9 trillion in 2016. 

“The Weaponization of Trade: the great unbalancing of politics and economics,” by Rebecca Harding and Jack Harding will be published on the 25^th October by London Publishing Partnership. Click here to find out more and to pre-order a copy.

THE 'ALTERNATIVE' 2017 by Johanna Wissing - Barclays

As is tradition, the so-called ‘Alternative’ was hosted in London on the occasion of the annual ITFA conference, which this year took place in Edinburgh, providing a networking opportunity for the London-based colleagues who did not attend the conference. This year the function was held on Thursday 7th September at the Bierschenke and was organised with special attention to providing a unique networking opportunity to the junior associates of the market to exchange views with their contemporaries and gain useful information from their senior colleagues; firms attending wholeheartedly embraced this opportunity, and invited many colleagues along who are fresh to the trade finance market.

The event was well attended with circa 80 individuals present, representing numerous geographies including Africa, the Middle East, Europe and of course the UK. This is yet again testament to the resilience of trade finance markets, and the close collaboration among market participants. Partnerships across institutions remain fundamentally key against a backdrop of multiple conflicts and an enduring difficult economic environment, and trade finance is a great example of the unifying force at play across geographic and institutional boundaries.

Firstly, we would like to thank all those who attended the event. A special mention goes to Johanna Wissing and Trevor Hockey for organising this event.

We hope to see such great turnout again later in the year at the ITFA annual Christmas cocktail which will be held at the Victorian Bath House, London on the 11th December 2017. Please save the date!

NEW ITFA MEMBERS

Arthur J Gallagher (UK) Ltd is a multinational insurance broker and risk management services provider with a dedicated structured credit and political risk practice which includes owned offices spanning nine international locations as well as a network of partner brokers in many more Arthur J Gallagher represent banks and other financial institutions, corporates, traders and export credit agencies arranging insurance based solutions for foreign direct investment and all forms of trade, export and commodity finance.

Nick Ollerenshaw will be the main delegate for all ITFA related matters.

Chubb is the world’s largest publicly traded property and casualty insurer. With operations in 54 countries, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients.

Chubb is defined by its extensive product and service offerings, broad distribution capabilities, exceptional financial strength and local operations globally. The company serves multinational corporations, mid-size and small businesses with property and casualty insurance and risk engineering services; affluent and high net worth individuals with substantial assets to protect; individuals purchasing life, personal accident, supplemental health, homeowners, automobile and specialty personal insurance coverage; companies and affinity groups providing or offering accident and health insurance programs and life insurance to their employees or members; and insurers managing exposures with reinsurance coverage.

Luc Reuter will be the main delegate for all ITFA related matters.

Tokio Marine HCC is the trading name of HCC International Insurance Company PLC. It is a specialist in underwriting both Surety and Credit Insurance and started business at the beginning of 1982. Tokio Marine HCC is a 100% subsidiary of the Tokio Marine Group, a premier global insurer, founded in 1879, with a market capitalization of over USD 30billion. It has financial strength ratings of “AA- (Very Strong)” from S&P.

Tokio Marine HCC is a leading market in the provision of surety bonds.  Its clients operate in all industry sectors and range in size from local or regional businesses to large international public companies. It operates both as a primary issuer of surety bonds and as a participant behind issuing banks. In Credit Insurance it operates in a very broad range of products, ranging from traditional short term trade credit, to medium and long term structured products, bank non-payment covers and political risk protection.

Bill Backhouse will be the main delegate for all ITFA related matters.

GII Capital Advisors Ltd (GCA) is a subsidiary of GII Finance Network (GFN). Both GCA and GFN are London based registered companies. GCA is an appointed representative of Duff and Phelps Securities Limited, which is authorised and regulated by the Financial Conduct Authority.

GCA was established in May 2016 with the goal of becoming a leading investment fund manager specialising in strategies that invest in structured trade finance assets while seeking to generatestable, non-correlated returns.

GFN was established in 2014 as a trade finance technology and service company connecting global capital markets to medium-sized and large corporates. GFN facilitates competitive, long term funding programs for its clients, based on their commercial payables and receivables.

Glenn Inniss will be the main delegate for all ITFA related matters.