Your course director has spent more than 40 years in the banking and financial sector, much of it in a senior managerial/Director role. He is a former Institute of Banking Lecturer, having gained distinctions in the exams. He is a subject matter aspect on all aspects of retail, corporate and global banking, including risk management and regulatory compliance. He has lectured extensively to both leading global financial institutions and to smaller bespoke specialists. He has delivered extensive programmes in all parts of the world including the USA, Europe, MENA, Africa and Hong Kong. He is currently an accredited Master Trainer at the world’s biggest global bank.
Trade Finance has been “re-discovered” yet remains a little mysterious. It is a product that has always generated strong revenues- often non funds based – and traditionally has exceptionally low credit losses (on a portfolio basis). Most global banks are able to apply very low probability of default ratios and usually lose as much to fraud as to actual credit losses.
The major general challenge to trade finance in recent times has been the impact of Financial Crime Compliance and Sanctions. Whilst credit losses and hence credit risk is low, FCC risk is very high because of the increasing tendency for global trade to pass through more than one country, use different modes of transport, use different currencies and transit through some regions where money laundering controls are not as strong as in others. This makes the audit trail very challenging. This is not a course about FCC but as trade finance is reckoned to be the main driver for money laundering, it needs to be understood.
To compound matters, many global banks have reduced their correspondent banking networks by up to two thirds – often based on the Transparency International CPI. This means it is becoming increasingly likely that more than two banks are involved in a transaction, causing delays in processing and frustration for the client. Sight LC’s can take 10-15 working days to be processed when there are two to three advising banks. Of course this has created opportunities for confirmation activities – provided FCC clearance is obtained.
Another challenge of trade finance is the tendency for banks to re-invent the wheel by using impressive sounding and not always easy to define marketing names to describe “new” products which are not actually new. “Buyer centric supply chain solution” actually is the sexier name for reverse factoring.
A final but by no means unimportant challenge is the uncertainty surrounding Brexit – where there remains a serious lack of clarity – and the impact of the Trump presidency in a few weeks’ time. One piece of good news is the Deutsche Bank settlement which might otherwise have led to a rescue.
In the market place dire predictions about the “death” of documentary credits are looking misplaced. It has been said repeatedly that the Open Account method of trading will eventually become the new normal having already taken a near 80% plus share of total trade transactions. Despite this, the LC refuses to die and against all expectations has become more important in the last few years. There are two reasons. Firstly, LC’s can be used to transfer the growing number of macro-economic and political risks (if “Confirmed”). Secondly several countries struggling with the collapse of energy prices now insist that L/C’s (and other instruments) are used as a method of recording and tracking the international flows of both goods and foreign currency.
This practical two day advanced level course will concentrate on what is happening in the market right now leaving delegates with a clear and working knowledge of how trade finance is undertaken in the real world, what actually happens and what are the implications for all parties concerned.
A good working knowledge and familiarity with International Trade finance is required to derive the maximum benefit from this course.
The course will use numerous case studies and will involve a considerable element of interactive class discussions. The Director will encourage delegates to question and test their knowledge at each stage of the course. At the end, all delegates will have a clear and full understanding of exactly how LC trade takes place currently across the globe at almost every level.
Case Study: Delegates will be asked to consider a real case to identify FCC risks and suggest how they may have been managed and mitigated
Case Study: An example using three different payment methods. Delegates will be asked to identify and explain what type of client would choose one in preference to the other two and why, to illustrate risks in reality.
Case Study: Showing how clients sometimes see the world of risk in a different way to bankers.
Case Study: Showing how Reverse Factoring works and how both Buyer Centric and Seller Centric models are being employed.
Case Study: Showing how different types of LC’s are used, why this is the case and what difference it makes to the risk profile.
Case Study: Using a standby in practice
Case Study: Delegates are asked to consider how to fund an export order using different types of contract arrangements.
Case Study: Using time lines and facility plotting to spot double finance and identify the actual funding gaps and customer needs.
Case Study: An example of a medium size business using structured finance.
Case Study: How to use goods as security for a trade deal.
Case Study: Warehousing in practice using a real example.
Case Study: Using these in practice.
Case Study: A real example showing how this makes a huge difference to working capital.
Case study: A large scale commodity deal and how it can be funded at an acceptable level of risk
Case Study: A syndicated deal.
Advanced trade finance and associated elements such as UCP 600, ISBP 745 and ICC 552 are important to the ongoing success of a trade finance business. As such all of our course form part of a larger group of courses:
Training Course Name
|Trade Finance Sales||UCP 600, ICC 552, FCC, International trade transactions|
|Letters of Credit||UCP 600, ISBP 2013, trade documentation|
|Risk in Trade Finance and Trade Finance Products||UCP 600, trade finance products, commodity finance regulations, URDG|
|Advance Trade Financing Course||UCP 600, risk in trade finance, letters of credit|