Trade Distribution & Syndication – the new era

Trade Distribution & Syndication – the new era

Most banks have already implemented the ‘originate-to-distribute’ strategy and portfolio management within banks’ global trade businesses, to help improve returns and shareholder values.

Pinnacle Trade Finance helps banks to reposition its trade distribution & syndication business with an objective to convert it, from a cost-centre to profit-centre, which contributes towards incremental revenues and augments returns.

Some of the potential areas to benefit for the banks are:

1. Change risk mitigation techniques: From unfunded/insurance (usually the bank’s current approach) to true-sales (futuristic approach for banks under Basel liquidity ratios)

2. Incorporate best market practices in trade distribution & syndication business

3. Introduce new defeasance product ideas/structures to sell-down different kinds of trade products (i.e. FI/Bank risks, supply chain, receivables, commodities, difficult markets, etc.)

4. Infrastructure: Setting-up operational processes, especially for ‘funded’ participations & true-sale structures, and incorporation of technology solutions/platforms for trade asset sales (both front-end and back-end)

5. Material for internal communication: Re-training and education regarding ‘originate-to-distribute’ strategy to all stake-holders (i.e. credit, sales, relationships, operations, products, in-country teams, etc.) – this usually helps grow the trade business overall, while, at the same time improve returns and balance between risk & rewards

6. Team structures: Advising on market best-practices, regarding Distribution team structures & reporting lines to originate from one-market and sell in another market, to help optimise pricing differential