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Enzo Caputo: Today, we have a unique expert with us, Mr. Dario Berta. He is an insider of the Swiss banking industry. He is an excellent specialist with open account for trade finance business. This sector of business trade finance is becoming important again in the Swiss banking industry and many Swiss banks have rediscovered trade finance as the new promising business. Hi, here is Enzo Caputo with swiss-banking-lawyers.com speaking from Zurich Paradeplatz.
Hi Dario, how are you today?
Dario Berta: Fine and you Enzo?
Enzo Caputo: It’s a great pleasure, I’m very well. It’s really a pleasure to meet you Dario.
Dario Berta: Thank you so much for the invitation.
Enzo Caputo: Thank you sir, with pleasure. So you worked many years for UBS and you have insider knowledge; you know what happens right now with the trade finance industry and how Swiss banks are managing trade finance again. What is your insider information? What is going on right now? What are the last developments? If you want to hear the last developments, you have to watch this video until the end.
Dario Berta: The past 20 years, I would say trade finance industry was left on beside as every bank was concentrating on wealth management and also Investment banking was reduced in the most banks like UBS or Credit Swiss. After the big mergers and acquisitions in the 90s, you saw after the year 2000 nearly that Investment banking and also trade finance was reduced.
Enzo Caputo: Less important.
Dario Berta: Less important, yes exact…
Enzo Caputo: Everybody made private banking, private banking wealth management as a management but not straight finance anymore.
Dario Berta: Absolutely.
Enzo Caputo: And what happens now, tell us?
“We see the past few years that more banks are again concentrating on trade finance but the problem is they don’t find good employees as in the 90s and in 2000. They reduced their staff. Some of them were kicked out of the banks.”
Dario Berta: We see the past few years that more banks are again concentrating on trade finance but the problem is they don’t find good employees as in the 90s and in 2000 they reduced their employees, and some of them they were kicked out of the banks.
Enzo Caputo: So the know-how is lost?
Dario Berta: The know-how in most of the private banks was lost. At the moment, we have in the actual situation some families owning banks with few insiders and specialists for trade finance activities.
Enzo Caputo: Can you show us a famous family owning a bank entering in trade finance again?
Dario Berta: Lot’s of Swiss bank families, they want to do again the merchant bank; this merchant bank will be domiciled in Zurich. They are right now in the process of raising capital to form the new bank.
Enzo Caputo: This information is insider information, this is very new, this is a recent development correct?
How Swiss Banks rediscover trade finance as a booming business
Dario Berta: I think what the family does here now is a good sign towards the right direction that we re-bring some old plans and some know-how to Switzerland in the trade finance industry.
Enzo Caputo: So, we have a revival of the trade finance industry definitely?
Dario Berta: Absolutely.
Enzo Caputo: Thank you very much. And now a very practical question; how difficult it is these days to open a bank account in Switzerland for trade finance activities? As we know, bank account opening has become very complicated and time-consuming, many clients are rejected, many clean clients are rejected. So if you need to open account for trade finance solutions for corporations , how is the situation? How difficult it is to open bank accounts for trade finance and are you able to offer this services? Is this something you can help or how do you see the bank account opening procedure with trade finance? Are there specialized banks in Geneva? Tell us a little bit about account opening, thank you sir.
Dario Berta: So when we compare the normal account opening in a Swiss bank and the trade finance account opening, it is 10 times more difficult to open account for trade finance activities. It’s they really analyze all your clients, all your transactions, the volumes, the frequency of the franchise transactions and so on. Especially when you deal with some high-risk countries and it is for example Egypt, Iran or Syria, it even becomes nearly impossible to get an account in Switzerland.
Enzo Caputo: Because also of the sanctions, the Iran sanctions for example you know which is very…
Dario Berta: Yeah, you’re absolutely right.
Enzo Caputo: At the moment, the banks are waiting until this Iran sanctions are lifted to start business or how do you see this?
Dario Berta: As I know, most of the sanctions are not any more in place. What is concerning Iran, there is some specialized companies in London, and the same we want to do out of Switzerland, help clients, forming accounts and doing business with Iran.
Enzo Caputo: For this is our business we do basically, you know, opening accounts, helping clients open account. So if you are involved in trade finance activities, call us we will help you to open an account very fast. You know we know the senior bankers, we know the trade finance specialists who have the know-how as we discussed before to open accounts; we will do the best that your account will be open in just few days. With the knowledge of Dario and our knowledge and the team behind us, I think there is nobody who is steadfast as we are in account opening. So let us speak a little bit about the volume; so which volume you need, how are the volumes to open an account? If you want to go to UBS for trade finance activities, how big are the volumes if you go to a smaller bank? Which are the alternatives? Which bank you can try if it doesn’t work with UBS, why it doesn’t work sometimes with UBS? It depends on the volumes or what is..?
Dario Berta: Absolutely. UBS, it depends on the volumes and it depends of the country-risk of the country you’re dealing with and the industry you’re dealing with especially. What I can say because this is really interesting point, we try to tailor made for each client a unique bank, a unique banker; so we really choose the right counterparty for each client. So what is important I think is that we do really a tailor-made solution on each plan.
“We provide a bank tailor-made to the needs and expectations of each client’s business.”
Enzo Caputo: Tailor-made account opening.
Dario Berta: The tailor-made means depending on the volumes receiving with, the countries and in which industry the client is.
Enzo Caputo: That’s it. For example, even geographically depends, if it’s active in Asia, if it’s active you know for example Africa, Credit Agricole for example is very good in Africa. So if you deal with Africa and you do trade finance activities for Africa, you should go to Credit Agricole for example. So that’s why it’s very important for us that we know the client in order that we’re in a position to serve him better, the better we know the client, the better we can serve the client with specifically tailor-made solutions.
Dario Berta: Absolutely right Enzo, absolutely. So we have, as the point before you mention, it is really important choose the right bank. We got French banks like Société Générale, Credit Agricole, Credit Lyonnais, who are very strong as he I said in Asia or in Africa too.
Enzo Caputo: Which are the most important players. I said Credit Agricole, Credit Lyonnais in Asia.
Dario Berta: Of course the French banks, we got Credit Agricole, which is a big player in Switzerland, but probably they are restrictive, but we have two big Swiss banks. We also have very good relationship to some Russian banks being very familiar in the trade finance sector and they really want to facilitate them, to help the client to do the best out of their transactions. So the Russian banks, Israeli banks and the Swiss banks, and on the other side of course traditionally the French banks.
“For small clients it’s very difficult to find a trade finance bank. The majority of clients are giving up finding a Swiss bank and they chose a foreign bank outside Switzerland. This is a mistake.
They miss a unique opportunity to work with a Swiss bank everywhere accepted and well respected.
Having a bank account with a Swiss bank is like having a passport or a VIP-entry ticket to the international commodities trading business community. Switzerland is the number one country for commodity trading activities.“
Enzo Caputo: Very interesting. But we have also connection to Liechtenstein for example. Liechtenstein, we know a bank with Iran connections, correct?
Dario Berta: Correct.
Enzo Caputo: Can you explain and then can you say a few words about this bank for specific Iran business?
Dario Berta: We have a small Bank in Liechtenstein which specialize only in facilitating deals in Iran, so this is a really small but boutique bank.
Enzo Caputo: Boutique bank.
Dario Berta: And we have excellent relationship to the owner and to the top management of the bank. On the other part in Liechtenstein, this is very interesting, we got also the two other big banks in Liechtenstein; they are not so active with trade finance but also familiar especially when it’s about transactions in Europe, this is also a solution.
How big are the fees charged by Swiss banks? What you have to know to find the most cost efficient solution for your business!
Enzo Caputo: Can you tell us about… can you tell to our audience the costs, how much costs a letter of credit? How much does it cost? Can you give a few examples with the quantities, with turnover for example or whatever?
Dario Berta: It’s always a little bit difficult right now to say about the costs. It can go from 20 basis points for a big transaction, when you speak about for example, Société Générale is facilitating a tank full of oil shipment, it’s just a few basis points to facilitate the whole transaction. When we speak about smaller transaction, it goes up 100 basis points over transaction and can be even a little bit more depending on the countries and on the contrapositive.
Enzo Caputo: Thank You, Dario. As you can see, maybe in Switzerland, it can be that maybe you pay a little bit more for a letter of credit but keep in mind, you have a letter of credit issued by a Swiss bank and this is the passport to the international business community; it opens the door, you’re everywhere accepted. You know a Swiss letter of credit issued by a Swiss bank is unique, it’s the passport, it’s the door opener so, and we, Dario and me, we will help you to negotiate a very competitive and fair pricing. We will check for you if the pricing is according to the industry, we will tell you are out of the industry standards or you’re in of the industry standard, is these price acceptable or not acceptable; that’s why we are here to help you, to support you, to make better deals and be successful together with us.
Dario Berta: Absolutely, you’re so right Enzo. Switzerland is still, like in England, they have Rolls-Royce, the Swiss bank is really Rolls-Royce when it’s about trade finance, about letter of credit, bank guarantees, about promissory notes and all the other products in the trade finance industry. Maybe I can also mention that we try to facilitate also clients with big discounting, factoring business etc.
Enzo Caputo: Very interesting, similar business.
Dario Berta: …Switzerland especially for international companies, Indian companies, Italian companies, French companies, whatever companies, I think we have some really competitive banks, they’re also in the factoring and for fitting area; so we can also help in this sector and we are very familiar and very much interested throughout the bank.
Enzo Caputo: Thank You Dario for this very useful information.
Dario Berta: You are welcome.
How important is the SGS-report for your business?
Enzo Caputo: Then I have another question; you know in Switzerland there is SGS, for many of substantial transactions you need reports from independent part, can you tell us about the importance of an SGS report, what it means, maybe a little bit about history, why is this SGS report so important for trade finance activities?
Dario Berta: I think we are in the very lucky situation that in Switzerland we have some big banks and we have also SGS who’s the world biggest player in this area and this facilitates of course a lot of transactions we are doing, as nearly in every city in Switzerland we got SGS that provides services and facilities…
Enzo Caputo: They do the dip test for example with the oil…
Dario Berta: They do the test with the oil, they do the test with the gold, with any commodity, they test even on raw herbs, on whatever material you have, they test it and they approve it.
Enzo Caputo: And these reports are accepted everywhere, correct?
Dario Berta: This is absolute standard in the whole world…no doubt.
Enzo Caputo: Thank you.
Dario Berta: SGS is known everywhere.
Enzo Caputo: Thank you. So as you can see, we really provide tailor-made solutions, we provide for you the Rolls-Royce solution. So in case you’re considering to do trade finance business in Switzerland, in cooperation with Swiss banks, give us a call and let us discuss how we can start a successful and remunerative business for you with the most reputable hand-picked bank. We go from bank to bank and we will find the best bank for your business, to be successful in business on a long-term basis. Thank you for your time, be rich and remain rich, I wish you a wonderful day. Thank You Dario.
Dario Berta: Thank you Enzo.
Enzo Caputo: It was a great pleasure to have you here.
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