Trade Finance: partnerships and differentiation are key
Farid Akhundov, chairman of the executive board of PASHA Bank, discusses how the bank is working to achieve its ambitions in corporate banking in the Caucasus region
1. What are the main trade flows that PASHA Bank supports for its clients?
PASHA Bank’s strategic goal is to become a leading corporate bank in the Caucasus region. For this purpose we developed a trade finance capacity which meets international standards. We focus on diversifying our trade finance portfolio providing full range of trade services to importers as well as exporters covering all sorts of flows from fashion and consumer goods to heavy machinery, manufacturing equipment and chemicals.
2. How important are partnerships in trade finance, particularly for a bank in your part of the world?
Partnerships with international financial institutions are of utmost importance. It enables us to finance structured and complex deals and also to cover trade flows from all over the globe and offer our customers a full range of trade finance services as well as vast geographic coverage. We have strong and long-lasting relationship with a range of top global banks as well as ECAs such as Euler Hermes, Sace, etc. Solid international ties enable us to offer considerably cheaper financing compared to rates offered by our competitors.
3. What do you think are the main areas of competitive differentiation for trade finance banks?
Main areas of competitive advantage for a trade finance bank are:
a) Speed of service
b) Ability to adapt and implement innovations to be in line with global trends and best practice
c) High level of expertise in order to offer structured deals with high complexity
d) Dedicated team of professionals who can offer custom-tailored trade services
e) Large network of international partners in order to cover trade flows on a global scale
f) Competitive rates
4. Do you think more new trade finance actors, such as PASHA Bank, will enter the scene as trade flows change and emerging markets become stronger?
As the non-oil sector grows with high pace, we believe that new competitors will inevitably enter the market and competition shall grow in trade finance industry. In order to sustain our competitive edge, we will continue investing in our trade finance capacity, widen our international ties and continue offering tailored solutions meeting the best interests of our customers. On the other hand, as part of our strategy, PASHA Bank pays close attention to neighbouring markets. As a result we entered Georgian market and plan to establish our presence in Turkey.