TRADE FINANCE:

solutions for Italian SMEs to be

successful in the international market

Turin, 17th June 2019

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For the contractual conditions of banking products and services, read

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Being competitive in international trade is

something hard to do…

What about your experience?

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CHALLENGE DIFFICULTY

SATISFACTION VS FRUSTRATION

OPPORTUNITY TROUBLE

Main risks in international trade3

COUNTRY CONTRACT

EXCHANGE RATECOUNTERPARTY

BANK INTEREST RATE

The Supplier and the Buyer have opposite needs and positions with

respect to the risk linked to the commercial party who is performing its

obligation in advance. In the International trade such positions and risks

are even amplified also in consideration of the distrust, of the distance

between the commercial parties, and of the possible language barriers.

The expectations of enterprises dealing with

a foreign counterpart

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SMEsINTESA

SANPAOLO

Trade Finance

Services/Solutions

Advisory

Proximity

The expectations of enterprises dealing with

a foreign counterpart

5

SMEs

Trade Finance

Services/Solutions

Advisory

Proximity INTESA

SANPAOLO

Proximity … in ItalyFocus on Piemonte, Valle d’Aosta and Liguria

6

217Relationship

Managers77

Foreign Trade

Specialists

8Global

Transaction

Banking

Specialists

25Corporate

Branches

Proximity … in APAC area Focus on ASEAN countries

7

Singapore

Ho Chi

Minh City

Hong Kong

Shanghai

Tokyo

SeoulBeijing

Qingdao

ShenzhenMumbai

Sydney

Ho Chi Minh City (Rep,Off)

Hong Kong (Hub)

Singapore (Branch)

Jakarta (Rep.Off.)

Hong Kong HUB

develops growth

strategies for the

bank in the Asia

and Pacific Area

ISP Group

DIRECT PRESENCEISP Group

CORRESPONDENT BANKS

71

Correspondent

Banks

2

Global

Transaction

Banking

Specialists

8

•INBIZ

•Bolero

•E-Presentation

•MT798

• Discounting of import L/Cs

• Import Financing

• Receivable Financing

• Export Advances

• Supply Chain Finance

• (SCF Program)

•Import and Export L/Cs

•SBLC

•International Guarantees

•Domestic Guarantees

•Documentary Collections

Trade Risk Management

WorkingCapital

Optimization

DigitalizationSales Finance Management

Advisory: identification of the best trade

finance solutions

• Discounting on a withoutrecourse basis of export L/Cs

• Discounting of promissorynotes with ECA support

• Confirming

Main risks in international trade9

The Supplier and the Buyer have opposite needs and positions with

respect to the risk linked to the commercial party who is performing its

obligation in advance. In the International trade such positions and risks

are even amplified also in consideration of the distrust, of the distance

between the commercial parties, and of the possible language barriers.

COUNTRY CONTRACT

EXCHANGE RATECOUNTERPARTY

BANK INTEREST RATE

Main risks in international trade10

COUNTERPARTY

Non payment; partial payment,

delayed payment as a

consequence of insolvency of the

debtor

Non performing of the contract

(delayed delivery; partial delivery; non

delivery)

Goods not collected

Undue enforcement of guarantees

The Supplier and the Buyer have opposite needs and positions with

respect to the risk linked to the commercial party who is performing its

obligation in advance. In the International trade such positions and risks

are even amplified also in consideration of the distrust, of the distance

between the commercial parties, and of the possible language barriers.

Counterparty risk: payment instruments

based on the level of trust in the importer

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HIGHTRUST

BANK TRANSFER(in ADVANCE)

DOCUMENTARYCREDIT

DOCUMENTARYCOLLECTION

BANK TRANSFER(DEFERRED)

LOWTRUST

Focus next slides

Open Account (deferred): how the exporter

can mitigate the counterparty risk

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Level of trust in the importer

BANK TRANSFER(DEFERRED)

STAND-BY L/C

EXPORT FACILE

PAYMENT GUARANTEE

FACTORING

LOWTRUST

HIGHTRUST

Export Facile 1/2

Assignment of short term receivables payable through bank transfer,

by one or more foreign debtors (Public Administration excluded)

Precautionary evaluation of foreign debtors and definition of the

maximum amount of the extended facility, on a revolving basis, for

each debtor (“the maximum amount”)

Assignment to ISP without recourse of short term receivables (up to

150 days), up to the maximum amount.

Assignement with recourse of:

• The credit exceeding the maximum amount

• The receivables falling due over 150 days

Main features

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Full coverage (100%) from the risk of insolvency/outstanding

payment, excluding country risk and performance risk, subject to

communication of non payment, within 30 days from the expiry date

No obligation in terms of both minimum amount and number of

debtors/buyers to be assigned

Precautionary and steady evaluation of foreign debtors, which

allows Italian companies to improve their own ability to evaluate

their foreign counterparties.

Access to the discounting of the receivables assigned without

recourse to the Bank

Export Facile 2/2

Benefits

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Documentary Credit: an evergreen payment

scheme based on banks support

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HIGHTRUST

LOWTRUST

COUNTRY

(Issuing Bank)

BANK

(Issuing)

COUNTERPARTY

(Importer)

DOCUMENTARYCREDIT

Confirmation

Star del Credere

Silent Confirmation

EXPORTER

Trade Finance: digital solutionsINBIZ is the ISP answer to SME and Corporate request to create

efficiency in trade finance (tipically paper based) business and make

easy their digital experience

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Inbiz offers ISP customers the

management, in a completely

digital and innovative way, of the

main Trade Finance products:

Documentary Credits

(import and export)

International Guarantees,

(issued and received)

Documentary Collection

(import and export)

Domestic Guarantees

and

Export Financing

Forex (spot/forward)

From documentary credits to Trade & Export

Finance solutions to improve ISP offer to SMEs

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Supplier’s credit: discounting

promissory notes without recourse,

with ECA support

Buyer’s credit

From the

basics…

… to

Structured

Export Finance

products

Discounting on a without recourse

basis of the deferred payment

undertaking incurred by the

confirming bank

Discounting on a without recourse

basis of the undertaking incurrred

by the issuing bank against a non-

confirmed deferred payment lc

LC confirmation with post-

financing

L/C import discount

Provide liquidity to

the client

Country and

Counterparty risk

mitigation

No or lower need

of client’s credit

limit facilities in

comparison to

other instruments

Selected dealsIntesa Sanpaolo a trade finance partner for different needs

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Deal 1 Deal 2 Deal 3

Exporter Italian Malaysian company, subsidiary of an Italian

group

Indonesian

Importer Vietnam European companies APAC companies

ISP branch Cuneo Singapore Hong Kong

Transaction type Confirmed Export LC (up to 15 months, validity + deferred)

+Discounting

Trade Finance Facility for LC Import

(raw materiale from India and Pakistan)

+ Short term Export

Financing(finished goods to Europe)

Uncommitted Trade Finance

BilateralFacility

Amount EUR 80.000 USD 1,5 Mln USD 200 Mln

ConclusionBack to the starting question mark

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CHALLENGE VS DIFFICULTY

SATISFACTION FRUSTRATION

OPPORTUNITY VS TROUBLE

THANK YOU!

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