Global Trade Trends and Challenges Summary Results – ICC Global Trade Finance Survey 2014 Vincent O’Brien Chair ICC Banking Commission Market Intelligence Group

1. STANDARD SETTING & RULE WRITING 3. ANALYTICS & PUBLICATIONS 2. POLICY & REGULATORY 4. EDUCATION, CERTIFICATION & E-LEARNING 5. DISPUTE RESOLUTION (DOCDEX) Our value proposition

ICC Banking Commission The leading and trusted authority for trade finance Vincent O’Brien Chair, ICC Banking Commission Market Intelligence Group (MIG) Vin

1. STANDARD SETTING & RULE WRITING 3. ANALYTICS & PUBLICATIONS 2. POLICY & REGULATORY 4. EDUCATION, CERTIFICATION & E-LEARNING 5. DISPUTE RESOLUTION (DOCDEX) Our value proposition

6 6 6 GLOBAL TRADE FINANCE SURVEY 2014 Reporting GLOBAL TRADE FINANCE SURVEY 2014 Reporting

Global Survey - Banks & Countries Banks from 127 Countries

slides 10 The Story Starts September 2008 Growth in world merchandise exports trade by region 2007Q1-2014Q2 (Year to year % change in dollar values)

THE PULL EFFECT IS NO LONGER PULLING. World merchandise trade volume and real GDP growth, P + 10-year moving average trade/GDP ratio 1.4

Product shares in world merchandise exports since 1900 (in %) Source: WTR 2013

Share, 2000/2013 (in %) Source: WTO secretariat GLOBAL TRADE TRENDS ME FOCUS * Estimated value

14 40% 37% Emerging Asia - Primary Market Focus for Trade Finance

15 68% 52% Trade Finance Activity Up 2014

Requests for CONFIRMATION OF LETTERS OF CREDIT 59% 51%

Requests for Guarantees and Standby Letters of Credit 69.74% increased demand for Standby LC’s 61.25% increased demand for Guarantees

Guarantee Claims - Injunctions and Refusals

Importance of Supply Chain Finance to Industry 65.74%

Increase in Demand for BPO 24.23%

Trends in Trade Finance Fees

SWIFT Trends in Traditional Trade Instrument Traffic

Issuance of letter of credit MT 700

2013 highlight In 2013, the SWIFT trade volume shows a decrease of 0.65% (much less than last year decrease of 2.22%). This is due to a decrease of 5.80% in category 4, while the category 7 shows an increase of 0.97%. Asia-Pacific continues to register far greater volume of MT 700 with 68% (import) and 75% (export) of the world traffic in It is also the region that increased the most. Top countries in volume of MT 700 are China, Bangladesh, Hong Kong, Korea, India. The region that shows the highest annual decrease (MT 700) is North America. The average value of a Letter of Credit (MT 700 only, amount converted to USD) in 2012 was USD616,000. In 2013, it is USD653,000 (+6%). Renminbi (RMB) became 2nd most used currency in trade finance, overtaking the Euro SWIFT trade traffic – 2013 statistics

Berne Union – Growth in Export Credit Insurance

Factoring: Comparison Factoring, LC & Credit Insurance Comparisons with World Exports (USD Millions) CAGR Cross border factoring236,607326,724355,379467,860555, % World factoring1,835,4892,190,0022,611,3712,814,0043,078, % Credit insurance1,122,6081,257,7941,495,2271,538,6091,630,9259.8% Letters of credit (LC)2,635,1252,700,7002,806,9652,854,9183,125,9574.3% Total world exports12,177,64214,850,56517,816, ,378, % Sources: Factoring figures from FCI. World Factoring includes both domestic and cross border factoring volume Short-term sovereign credit insurance figures only from Berne Union (2013 estimated) The LC figures from ICC/SWIFT study. Swift does not release LC issuance, but in December 2010 its board agreed to carry out a ‘trade snapshot’, releasing the number of MT700 commercial standby and guarantee messages, including average invoice size, All figures are estimates based on actual data. Except the 2010 figures which are based on the number of MT700 messages issued in the year and the average invoice size for the month of December only figures are calculated based on the % change in the number of MT700 messages created year on year The world merchandise export figures from the WTO (2013 estimated based on revised projected growth rate of 2.5%)

Hottest Topics on Radar 68% declined transactions due to KYC & AML 31% closed correspondent relations due to KYC & AML 41.03% of respondents reported that complying with sanctions restricted trade finance operations ‘COMPLIANCE’ as the biggest single burden facing trade finance.

Global Trade Trends and Challenges Summary Results – ICC Global Trade Finance Survey 2014 Vincent O’Brien Chair ICC Banking Commission Market Intelligence Group