Page 30 - Buy Russia - bne IntelliNews monthly magazine April 2017

30 I Special report bne April 2017
Grappling with the “new normal” of sanctions and compliance
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It’s been a rough few years for global trade finance, with often sharply reduced activity amid sluggish or negative economic growth in a heavily sanctions- and compliance-burdened landscape. This has forced many national, regional and global banks with trade finance functions to pedal twice as hard just to keep momentum.
Yet innovative players have still found opportunities between a rock and a hard place, developing new tailored solu- tions and products to meet the needs of clients, especially for small and medium- sized enterprises (SMEs), which have been disproportionately denied the
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means to expand their trade as the big fish hoovered up available finance.
In Eastern and Central Europe, opera- tors are again looking for chinks of light after the bleak period that ensued with Russia’s 2014 annexation of Crimea and the subsequent imposition of punitive EU and US sanctions. This, coupled with low commodity prices and cur- rency devaluation, hammered Rus-
sia’s economy for the next two years, with far-reaching spillover effects.
“The region as a whole still suffers from the economic downturn in Russia, which affects neighbour countries and
has led to a decline of all volumes of trade finance,” Holger Kautzky, Head of Financial Institutions at Commerzbank who is responsible for the region,
told bne IntelliNews last October.
Roll the clock forward six months and how the kaleidoscope has turned, with the shock election of Donald Trump
as US president, and Russia’s financial health gradually stabilising after the Opec production cut deal buoyed oil prices. While this doesn’t translate to a sudden boom in trade finance in and around the country, it is creating more opportunities, even with sanctions still in place and a continuing need to reform economies.