Report: Bank Trade Finance Revenues Set To Fall 8 Pct In 2020

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As returns from cash management offers are forecasted to drop 12 percent, trade finance revenues for banks are poised to fall by 8 percent in 2020. But a somewhat fast bounce-back for transaction banking revenues is forecasted to take place next year, the Global Trade Review (GTR) reported, citing a Greenwich Associates report.

“The transaction banking industry has been in steady growth mode for the better part of a decade. In 2020, the global pandemic has brought that to a screeching halt,” the “Banking after COVID-19” report noted.

Banking revenue from international transaction services increased 2 percent compound annual growth rate (CAGR) during the last 10 years to approximately $400 billion in 2019. Transaction banking revenues are forecasted to drop by 6 percent in 2020 in contrast to last year.

However, HSBC data published by GTR indicates a rise in the count of supply chain finance (SCF) transactions in June in Asia, especially throughout Vietnam, Thailand and Indonesia.

Taulia, a SCF firm, told the outlet at a prior time in 2020 that early payment volumes throughout its platform rose in excess of 200 percent in March on a month-on-month basis.

In August, news surfaced that Dignari Capital agreed to offer $50 million to Sheng Ye (SY) Capital in a strategic deal to look into novel supply chain finance choices for small- to medium-sized businesses (SMBs).

“We are very optimistic about the supply chain financing industry and see substantial financing needs in China’s underserved [SMB] sector,” Dignari Capital Founding Partner Grace Tan said in a past press release. “SY Capital is able to provide flexible and efficient financial services to upstream [SMB] suppliers and at the same time maintain a good risk control record with a zero non-performing loan ratio.”

Dignari Capital’s investment will work to grow access to various funding channels.

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