Reinforcing Transaction Banking in the UK
by George Stein, Head of Global Transaction Banking UK, UniCredit
Despite the short- and potentially mid-term uncertainty created by the result of the EU referendum in the UK and subsequent changes to political leadership, the UK is a large economy and a core market for exports from Europe and beyond. UniCredit’s London branch fulfils a vital role in meeting corporate ambitions in the UK, and for UK investors looking towards UniCredit’s home markets.
Meeting the needs of UK clients
Recent UniCredit economic research  highlights that foreign direct investment (FDI) has been an integral aspect of corporations’ globalisation strategy. When looking at the UK market specifically, this has two key implications:
- Firstly, looking at UK corporations, the UK has the second largest outward FDI stock globally after the US. While the US is a key market for these investors, as are special purpose vehicles in countries such as Luxembourg and the Netherlands, UK companies are also investing heavily in ‘real’ economies in other parts of Europe.
- Secondly, looking at continental Europe, Germany is the third largest foreign direct investor worldwide, with FDI of USD 1,600bn. In addition, UniCredit’s other home markets, Italy and Austria also have major outgoing FDI flows at USD 550bn and USD 220bn respectively. The UK is the second largest destination for these companies after the US. UniCredit research suggests that German and Italian companies will double their foreign investment activities by 2030, and Austrian multinationals more than triple their FDI outward stocks.
Facilitating trade and investment between the UK and our home markets was one of the major factors that led to the decision to build up the Global Transaction Banking business in UniCredit’s London branch. By reinforcing our ‘on the ground’ presence in the UK, we can better support our home-market customers as they pursue their international growth strategies, and build partnerships with UK companies that are seeking to leverage our solutions, expertise and depth of presence in our home markets of Germany, Austria and Italy, and in central and eastern Europe (CEE).
The role of transaction banking
UniCredit has a strong strategic emphasis on transaction banking, which involves leveraging our branch in London, along with many other branches of our international network, including New York, Hong Kong, Singapore and Shanghai to meet the international needs and aspirations of our customers. In London, for example, although transaction banking has been an important aspect of our service delivery for many years, we are making a major investment in skills and solutions to build capacity and expand the breadth of our services. For example, we are expanding our proposition in both cash management and trade finance to support the large number of exporters based in London, and we have reinforced our correspondent banking relationships, with particular strength in the CEE region. Furthermore, we are now offering a newly enhanced platform for both corporations and financial institutions seeking to concentrate their cash in London, which we believe will prove to be very attractive to customers in our home markets and beyond.
 UniCredit Global Themes Series no. 33, June 2016