The International Chamber of Commerce (ICC) Banking Commission has released its 2018 Trade Register report – again highlighting the low risk nature of trade finance in comparison to other asset classes.
- In 2018, global trade reached a new peak of US$18.5 trillion, underpinning a trade finance revenue pool of US$48 billion.
- ICC Trade Register data confirms default rates from 2008-2018 are low across all products and regions surveyed.
- For the first time, payables finance and non-OECD Export Credit Agency-backed export finance products are included in the Trade Register.
This report captures a full decade of trade finance-related data – containing over US$12 trillion of exposures from 24 million transactions across six products and 25 banks worldwide.
Results indicate that default rates from 2008-2018 are low across all products and regions, averaging 0.37% for Import Letters of Credit (L/Cs), 0.05% for Export L/Cs, 0.76% for Loans for Import/Export, and 0.47% for Performance Guarantees (when weighted by obligors). The results extend the decline in risk seen in 2016 into 2017, likely driven by strong GDP growth and the general de-risking approach taken by banks with regards to their balance sheets.
The report can be accessed here ICC Trade Register Report 2018.pdf