Barclays eyes Middle East trade finance markets
(15 November 2016 – United Kingdom) Barclays wants to access trade and working capital finance opportunities in the Middle East, utilising United Arab Emirates’ (UAE) status as a global trade hub that connects Asia, Middle East, Africa, and Europe a senior executive said in an interview.
The bank’s Managing Director and Global Head of Trade and Working Capital, Baihas Baghdadi said: “Strategically from a trade finance perspective we are determined to be present in all the major trade hubs such as Singapore, Hong Kong, Frankfurt, Dubai, London and New York. The UAE is top priority in the Middle East and North Africa (Mena) region both in terms of volumes and number of transactions.”
The Emirates are one of the bank’s top five countries for trade finance business covering the whole region from the UAE.
“For us, the UAE is a great corridor to Asia. The India — UAE corridor is a really an important one. Barclays is present in India and the UAE and we want to further leverage that corridor,” Baghdadi added.
“With our massive investment banking footprint in the west, we cover most of the global corporates in the Western hemisphere. We do support all our global corporates doing business in the GCC. From the west, we complement our product offering by following their trade flows into this part of the world and we also capture opportunities in trade flows to and from the east,” he said.
“Trade finance is short-term in nature and it is self-liquidating. It is very capital efficient. Most of the risks related to sophisticated structures and potential fraud. Here is where banks have to do their due diligence and KYC [know your customer] process very carefully making sure the underlying transactions is for real. That is an expensive process. When people gets into competition people tend to forget the costs and offer competitive pricing. This is good for the market but such low prices may not be sustainable,” said Baghdadi.
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