WORLD - TRADE FINANCE - ITFC signs up HSBC as key trade finance partner

CPF FINANCIAL  - International Islamic Trade Finance Corporation (ITFC) and HSBS sign MoU to implement Shari’ah-compliant trade financing

Dr Waleed Al-Wohaib, Chief Executive Officer, International Islamic Trade Finance Corporation

HSBC has signed a Memorandum of Understanding with the Islamic Development Bank’s ITFC on trade finance and to provide help on various treasury activities such as joint trade financing and investment of liquidity. The MoU means ITFC customers will be able to use HSBC’s services to facilitate the issuance of Letters of Credit on behalf of ITFC for customers who import or export goods.

HSBC Amanah, the bank’s global Islamic finance business, is present in seven countries, four of which contribute more than 50 per cent to the GDP of Organisation of Islamic Conference (OIC) member countries. (source)

Dr Waleed Al-Wohaib, Chief Executive Officer of ITFC said, “Since 2008, we have approved more than $2 billion of trade financing every year. In 2011, ITFC is expected to continue disbursing over $2 billion of trade financing to companies in Asia, the Commonwealth of Independent States, MENA and Africa.”

“This is a significant moment for Islamic finance because with the combined expertise of HSBC and ITFC, Islamic trade financing is set to become the next pillar of growth for the industry. HSBC believes that trade and capital flows between the emerging countries of the world are likely to increase significantly over the next few decades. Given HSBC's footprint in the emerging markets of Middle East and Asia, a partnership between ITFC and HSBC will play an important part in increasing intra-OIC trade," Razi Fakih, Deputy CEO of HSBC Amanah, said.

Besides facilitating trade, HSBC will cooperate with ITFC in joint trade financing through syndication and co-financing. ITFC is also expected to invest its liquidity in Shari’ah-compliant investment assets such as HSBC’s 'Overnight Commodity Murabaha Investment' product. HSBC was the first bank to launch such a product in 2009 and remains among only a few banks which offer it. 

The International Islamic Trade Finance Corporation (ITFC) is an autonomous entity within the Islamic Development Bank (IDB) Group. ITFC exists to be a catalyst for the development of trade among and between the Organisation of the Islamic Conference (OIC) member countries and with the rest of the world with the vision to be a recognised provider of trade solutions for OIC member countries’ needs.

Source :  http://www.cpifinancial.net/v2/News.aspx?v=1&aid=8962&sec=Islamic%20Finance - Aug 8, 2011