Best Global Supply Chain Finance provider – Standard Chartered Bank

Is Standard Chartered Bank the best global Supply Chain Finance Bank? According to Global Finance magazine it is.

Standard Chartered has an enviable franchise in the Middle East, Asia and Africa, and deals with small and medium sized suppliers in those markets. They are generally not a strong franchise in OECD markets, and focus on serving a select portfolio of large corporates that fit their strategy.

Given their relationships with many small suppliers, they can focus solutions where there is more value added – such as pre shipment or purchase order finance. See Jason’s post Beyond Approved Invoices: Using a PO to Trigger Financing

So let’s get back to the award. How does Standard Chartered win best global supply chain finance provider?   Is it their technology? The fact that they help small suppliers in emerging markets? Have they built some innovative factoring or other finance platform? Just what is it?

I mean they are not big on the Reverse Factoring stage, nor dynamic discounting. So I do think it goes back to their ability to help small business in emerging markets. I certainly agree that providing finance to small guys in emerging markets is important. I won’t go as far as to claim it is instrumental for global recovery, but it is an area of immense need given high price of money for many companies in these markets and a general lack of credit insurance and factoring solutions.

Standard Chartered Bank is also a leader in RMB trade settlement solutions, which is important given the Chinese currency use  for trade settlement has increased more than fivefold since late 2011, although the currency still represents a small fraction of all world payment currencies.

On the other hand, Standard Chartered has made recent news around their commodity lending business that has the markets very nervous. According to one source, the bank is believed to have up to some US$61bn in outstanding loans to commodity traders and manufacturers at a time in which the prices of oil, copper, iron ore and other major components of Standard Chartered’s portfolios are hitting all-time lows.   Economists at Macquarie forecast cumulative losses of almost US$6bn – about the same amount as a year’s profits.

So the Worlds Best Supply Chain Finance bank? I guess it all comes down to the criteria.

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