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TradeXBank targets Swiss commodity finance revival after Sberbank sell-off

Sberbank has completed the sale of its sanctions-hit Swiss subsidiary, with renamed entity TradeXBank aiming to boost financing for raw commodities with a focus on Ukraine. 

The acquisition of Sberbank Switzerland for an undisclosed fee was announced late last week by Geneva-based m3 Groupe, which has operations in real estate, healthcare and hospitality. Founder and chairman Abdallah Chatila confirmed in a statement that all current employees would be retained and restrictions on its activity had been lifted. 

The Swiss Financial Market Supervisory Authority (Finma) temporarily eased restrictions against the sanctioned Russian bank’s subsidiary until midnight on September 5 in order to facilitate the sale, and a spokesperson for m3 Groupe confirmed to GTR the following day that the transaction had been successfully completed. 

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Finma says TradeXBank will retain the banking licence held by Sberbank Switzerland, though the lender had been subject to protective measures from the regulator since March, including a ban on undertaking any non-necessary transactions. 

Annett Viehweg, chief executive at TradeXBank – the same role she held at Sberbank Switzerland – says the takeover aims to maintain the bank’s expertise in trade finance and grow m3 Groupe’s interest in primary commodities. 

She adds the lender “will continue to focus on commodity trade finance to support global trade flows during these challenging times, with a particular focus on the Ukrainian market”. 

Geneva-based Christian Lüscher, a veteran lawyer and former parliamentarian who has been appointed chair of TradeXBank’s board of directors, adds that it aims to “restore strong financing of raw materials in Switzerland” in comments to Swiss newspaper Le Temps. 

Historically, a significant part of the bank’s business has been in Commonwealth of Independent States countries.  

Orhan Gunes, previously head of commodity trade finance at Sberbank Switzerland and now in the same role at TradeXBank, said at last year’s GTR Commodities event in Geneva that the lender’s “strategic mission has always been in regional expertise in Russia… and markets in the Black Sea, Mediterranean Sea and Baltic Sea”. 

Since then, however, Russia’s invasion of Ukraine has prompted retaliatory sanctions from the Swiss government, as well as from the EU, the UK and the US. 

Trade from Black Sea ports has resumed in recent weeks following a humanitarian agreement between the governments of Russia, Ukraine and Turkey, but shipments remain irregular and infrequent. 

m3 Groupe did not respond when asked which markets or client types TradeXBank now plans to target. 

The new-look lender is bullish about its financial firepower, however, having made CHF25mn (US$25.5mn) profit last year, Chatila tells Le Temps 

With non-sanctioned clients withdrawing CHF1.5bn in assets in recent weeks, Chatila says the bank has between CHF600mn and CHF700mn on hand, and that m3 Groupe will inject a further CHF500mn in equity. 

“With our current size, we are already one of the 20 largest Swiss banks,” he says. 

In July, Finma granted the bank a five-day window in which to settle due claims of creditors and make payments accordingly, allowing it to reduce its balance sheet. 

The regulator is now “closely overseeing the change of ownership in coordination with national and international bodies”, it says. 

The acquisition means Sberbank Switzerland has avoided succumbing to the same fate as Amsterdam Trade Bank (ATB).  

The one-time trade finance specialist was considered a solvent and healthy business until sanctions were imposed on its Russian parent company, Alfa Bank. With counterparties no longer able to do business with ATB, it was placed into the hands of bankruptcy trustees by a Dutch court in April. 

The acquisition also comes as Sberbank Group agrees to sell its subsidiary in Kazakhstan to state-owned development institution Baiterek National Managing Holding. The lender says it decided to withdraw from the country to protect local clients “in the current geopolitical situation”. 

“Sberbank Kazakhstan has a sufficient liquidity reserve, a high-quality loan portfolio and has been one of the key participants in the financial market of Kazakhstan for many years,” Sberbank Group says in a statement. 

The post TradeXBank targets Swiss commodity finance revival after Sberbank sell-off appeared first on Global Trade Review (GTR).

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Published 23 November 2022