Trade Products and Services

Trade Finance Centre

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Macro and micro issues

Trading companies in small economies are confronted by barriers of a relatively small domestic market place and a lack of resources which automatically result in a heavy dependence on international trade.

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Global crisis

�The present global operating environment exposes small islands like Malta to the developments being experienced by its trading partners. It is thus essential that Maltese traders are equipped with the necessary knowledge of products and services available to them to trade successfully.

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Key player in the market

�The Bank of Valletta Group is committed to support businesses engaged in international trade. In 1993 it therefore set up its Trade Finance Centre. This centre is equipped with a team of highly trained trade specialists who provide expert back -up the group’s routine operations.

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Trading partners

�Even before joining the European Union our main trading partners had always been in Europe, North Africa, middle east and the far east notably China.

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Customer orientel approach

�Our approach is to build closer business relationships with both our customers and the wide corresponding bank network which provides access to international services.

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�It is through this approach that we can better understand the needs of our customers. We can then tailor and structure our financial products and services to suite best their business requirements and which enables them to have the competitive edge required in international trade.

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�Our team of specialists are trained to guide the customer to seek and contract the most beneficial payment terms, whether they are importing, exporting or trading.

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Trade Finance

Trade finance can be described as the science on how to manage money,banks, credit investments and otherassets for international tradetransactions

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� Trade Finance is more than regular lending. It refers to products and services that assist importers and exporters to fulfill their financing needs

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�Trade finance is a source of working capital for many traders in need of financing to procure, process or manufacture products before sale in future

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�Trade finance is also important for individual traders and firms trading internationally, because it can shape the competitiveness of their contract terms

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Tools needed in Int Trade

�Trade finance is therefore important for any country as it facilitates international trade. As international trade increases, so does the importance of trade finance.

�Absence of an adequate trade finance infrastructure is, in effect, equivalent to a trade barrier

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�Importers facing difficulties accessing trade finance, have limited chance to offer competitive terms to their suppliers the like of advance payment terms, letters of credit, guarantees of avalized bills for example

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Major Risks in International Trade

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�Conversely, exporters with limited supply of trade finance, will have difficulties in penetrating the market because, while importer may prefer to buy on open account, the supplier may not be in a position to accept or offer such terms.

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Challenges

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Trade finance products

�Our trade finance facilities include:�Overdraft and loan facilities�commercial letters of credit�Letters of assignment�Back to back letters of credit�Bills discounted�Bills discounted under letters of credit

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All our credit facilities are subject to theBank’s credit policy document. Credit facilities are available from our extensivebranch network all over Malta, our five Business Centres and our Corporate Centre.

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�The TFC centre handles all facilities backed by letters of credits such as:

�Transferable letters of credit�Letters of assignment �Back to back letters of credit�Trade loans backed by inward letters of

credit.

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�I thank you

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