Trade Finance
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Driving the Trade Finance Agenda in Europe

An Executive Interview with Thomas Dusch, Managing Director, Head of Trade Finance International Sales Germany, UniCredit

In this month’s Executive Interview, Thomas Dusch of UniCredit talks to Helen Sanders, Editor, about some of the trends he is seeing in the way that trade finance and working capital financing solutions are being used by European corporates.

What trends are you seeing in the use of traditional trade finance instruments in Germany and other parts of Europe?

Thomas DuschAs an exporting nation, the guarantee business has always been important in Germany, whether classic bonds, performance bonds or other variations, reflecting the industrial diversity across the country. While trade continues to be strong, we are seeing a shift in trading counterparties. For example some export business has declined, while some has become more complex. At the same time, new markets are developing, however, such as in Africa and Middle East, and more recently emerging markets in Asia, such as Pakistan, Bangladesh and Myanmar. As new markets open up, letter of credits are more important than ever before, as corporations are often doing business with less familiar counterparties.

Amongst large multinational corporations, import letters of credit (LCs) are less important, as they often buy on open account. In contrast, export LCs remain essential, and their use continues to grow, for similar reasons to the increase in guarantee volumes.