& Finance: ICC 2016 Trade Survey
The report should be read in full in order to understand
context. However, a few key extracts are highlighted below:
Only 52% of respondents reported an
increase in overall trade finance activity during 2015; down from 63% in 2014 ?
Commercial L/Cs make up 38% on average,
of the trade finance product mix; down from nearly 45% in 2014 ?
Nearly 35% of respondents reported an
increase in supply chain finance deals. For commercial L/Cs, on the contrary,
nearly 50% of respondents reported a decrease ?
21% of respondents experienced an
increase in claims made under guarantees and standby L/Cs ?
15% of banks reported experiencing an
increase of court injunctions barring payment under bank independent
13% of respondents reported an increase
in the troublesome issue of allegations of fraud ?
40% of survey respondents anticipate
increased customer driven demand for confirmations of letters or credit ?
66% percent of respondents reported
that they experienced no change in their overall refusal rate of documents
on?first presentation with nearly 19% indicating a decrease of documents
rejected on first presentation under documentary credits
AML and KYC issues are at the forefront
of issues seen by practitioners to be impeding the underwriting of trade
finance business, while also adversely complicating the processing of that
business at the transactional level. Notably, 90 % of survey respondents
pointed to this issue, in sharp contrast to 2015, when 81% highlighted this
concern in the 2015 survey
Only 7% of banks reported that their
trade finance processes had been digitized "to a great extent", with 43%
reporting "very little" advancement in this regard.
Category 7 messages fell by 4.49% and
category 4 messages fell by 6.79% compared to 2014 data.
The average value of a letter credit
fell sharply from USD643,000 in 2014 to USD350,000 in 2015.
79% of respondents indicated no change
in their take-up of Bank Payment Obligations, indicating that technology- driven
change is not substantially driving business practices in 2015.
47% of respondents indicated that their
net income had increased between 2014 and 2015.
The full report can be accessed at http://www.iccwbo.org/News/Articles/2016/New-survey-findings-worsening-global-shortage-of-trade-finance/