Best Trade Bank in Northern Europe and Scandinavia: SEB

Runner-up: Nordea/Deutsche Bank
Commended: Danske Bank
2007 Winner: -

Trade finance has a long tradition in Skandinaviska Enskilda Banken (SEB). It has been a core part of its offerings for more than 150 years, as SEB has followed the large Nordic multinationals in their early expansion all over the world.

The trade finance arm of SEB used to have a reputation as, well, a bit stodgy; reliable, but boring. Its emphatic win in the TFR Awards 2008 reflects the big change that has taken place at the bank in recent years.

“A critical development was to change SEB Trade’s environment, the reorganisation into Global Transaction Services, where we can leverage from related areas, and both widening and deepening the nature of trade finance,” says Lars Millberg, Global Head of Trade Finance at SEB.

That transformation also runs to the mindset of staff in the area, where Millberg has masterminded a merger of cash management with trade finance. “In fact, we have not seen the full effect of this change and our expectation is that there is plenty yet to be obtained out of this. In our product management and development department, we have conducted a quite extensive project, called best practice, aimed at setting up market best-practice processes and routines, laying the foundation for an enhanced time to market in product development,” says Millberg.

During the past year, SEB has been increasingly active as a participant in some of the big structured trade-finance deals, especially out of Russia, but Millberg is keen to emphasise the relationship-management aspect of the Bank’s approach.

“Of most importance is that we continue to maintain our position as a trusted advisor for our clients. This is the most challenging and biggest success, to be able to increase the value-add. In several client cases, we made a major positive impact while focusing on our four cornerstones, working capital, risk management, process efficiency and accessibility.

“We are rolling out a new methodology this Autumn where we can score our clients on various processes and risk management, and compare them with the best corporates in the industry. We call it the Trade Finance Value Chain,” says Millberg. “The beauty of it is that the corporate has the possibility to enhance its trade finance processes and, at the same time, lower their total costs.”

Millberg’s plans for SEB in trade finance reflect his background in cash management. “We believe the way forward is to be able, to the broadest extent possible, to have an offer covering supply and ledger handling, plus sales-support tools in a comprehensive package.

“Trade banks have to take a larger grip over the supply chain and ledger activities, hence, broader coverage and understanding. Also, we need to focus on the total cash flow, including forecasting activities of the company, rather than on cash only in OECD countries,” says Millberg.

Like every other trade bank, SEB has been enjoying a bumping up of margins, post-credit-crunch, and it has invested accordingly to take advantage of that. “We have established a totally new support organisation that we have been rolling out to all our sites, and we have increased the number of sales staff by more than 50%.”

It now has a better balanced ratio of front-end staff to back-end, especially following the outsourcing of document examination to Wachovia in Hong Kong. “Once documents are generated by one party, the information in them should never have to be re-keyed. Rather, they should be electronically transferrable between systems, increasing the straight-through processing, while decreasing days sales outstanding and enhancing end-to-end cash flow,” says Millberg.

Lars Millberg, SEB