Export Financing – from a bank‘s perspective - Aga Portal

GM-C | Brand Management | Frankfurt am Main/März 2016

Export Financing – from a bank‘s perspective

Export Financing Conference UzbekistanTashkent, December 4, 2019

Commerzbank at a glance

› Commerzbank is a leading international commercial bank withbranches and offices in nearly 50 countries.

› The Bank’s two business segments – Private and Small-BusinessCustomers, Corporate Clients – offer a comprehensive portfolio offinancial services precisely tailored to their customers’ needs.

› Commerzbank transacts approx. 30% of Germany’s foreign tradeand is the market leader in German corporate banking.

› The Bank offers its sector expertise to its corporate clients inGermany and abroad and is a leading provider of capital marketproducts.

› The Bank serves over 70,000 corporate clients, multinationals,financial service providers, and institutional clients worldwide.

› In 2018, Commerzbank generates gross revenues of € 8.6 billionwith approx. 49,000 employees.

Commerzbank is committed to providing banking solutions for all the cross-border activities of our strategic client base

Export & Agency Finance | Commerzbank Aktiengesellschaft | December 2019 2

Commerzbank at a glance

Ger

man

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• Unchallenged #1 financing of SMEs in Germany

• Strong retail presence: 1,000 branches in Germany

• Top ranking M&A - Equity Research & Sales

• 5 subsidiaries, 23 branches & 34 rep. offices

• Directly represented in 50 countries

• Network completed by over 30 partner banks

Commerzbank is a Global partner and a European Expert

Select Commerzbank Statistics2014 2015 2016 2017

Balance Sheet Total (€bn) 558 533 480 452

Core Tier 1 Ratio (fully phased-in; %) 9.3 12.0 12.3 14.3

Employees 52,103 51,305 44,267 49,300

2018

462

12.9

49,410


Export & Agency Finance

4Export & Agency Finance | Commerzbank Aktiengesellschaft | December 2019

Export Finance is a reliable banking product

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Export Finance is contributing to the growth of the real economy at two ends (Exporter and Importer)

Export Finance is always tied to a supply contract (for durable capital goods)

Export Finance is making use of national Export Credit Agencies (“ECAs”) like Euler Hermes in Germany, SERV and OeKB

Export Credit Agencies are governmental instruments. They support their respective home economies by granting long-term insurance cover to Exporters and Financing Banks

The overall loan amount in Export Finance is defined by: contract value (typically 85 %) plus ECA-related costs (up to 100 %) plus Interest during construction (up to 100 %)

Export & Agency Finance | Commerzbank Aktiengesellschaft | December 2019

FinlandFinnvera

Czech Rep.EGAP

Germany Euler Hermes

FranceBPI france

SpainCESCEBelgium

Credendo

NetherlandsAtradius

UK UKEF

LuxembourgODL

Japan NEXI

AustriaOeKB

S. Korea KSure

Switzerland SERV

DenmarkEKF

NorwayGIEK

MultilateralMIGA

Our Partners in long-term Finance: Export Credit Agencies & Multilaterals

SwedenEKN


International framework

The basic principles for ECA-covered financing are laid down in the OECD-Arrangement on Officially Supported Export Credits (‘OECD Consensus’):

Applicable to all official support provided by or on behalf of government for export of goods / services, which have a repayment term of > 2 years

Advance and interim payments of at least 15% of the export contract value at or before the starting point of credit

Limit for local cost: max. 30% of the contract volume

At least semi-annual repayment profile in equal instalments

First instalment not later than 6 months after the “starting point” of the credit

Maximum credit periods, differentiated by country groups:

OECD High-income countries: max. 8.5 years Other countries: 10 years plus


The maximum tenor for ECA- long term financing depends on the contract value

Maximum tenors according to common rules Berne Union

Category I countries (High Income OECD): 5 years (8.5 years with notification)

Category II countries: 10 years plus

8

5 years EUR 300.000,-

6 years EUR 3.000.000,-

7 years EUR 5.000.000,-

8 years EUR 7.000.000,-

8.5 years EUR 10.000.000,-

10 years plus EUR 15.000.000,-


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Benefits of Export Finance

Importer

• Export Finance is the most attractive instrument to finance CAPEX in terms of pricing/tenor

• Can be sculptured to the project needs within a certain framework

o Disbursements pro rata supplies and services

o Grace period for principal until delivery/readiness for operation

o No idle amount• Enables attracting other financing

instruments

ExporterLocal Bank (Borrower)

• Receives payment at sight and enables long term payment conditions to clients without using own balance sheet

• Attractive financing is a key sales argument, particularly where the ECA structure is a last resort alternative

• Lending Bank arranges the financing and assumes several risks

• Access to long repayment tenors (10 years plus) having a positive effect on the balance sheet of the borrower

• Financing of ECA premium and capitalized interest during construction (on a case by case basis)

• Diversification of funding sources, preserving commercial borrowing capacity for the finance of (future) CAPEX

• Provides domestic clients with long term financing sources


Uzbek Industry Sectors attract Export Finance


A

B

C

D

E

Plan for greater use of clean energy. Governmenthas USD 2.6 billion investment program in hydro.Only 20% of available hydropower potential hasbeen exploited.

Power

Existing and new gas processing plants forvarious products along the value chain (p.ex.Kandym Gas Processing Complex and ShurtanGas Chemical Complex).

Oil and Gas

Long tradition to build and assemble cars;investments for electric vehicles.Automotive

Existing and new investments in fertilizerplants.Chemicals

Diversified, small, medium and large investments intextile machinery for all kinds of garments, fabrics,carpets, etc. all over the country.

Textile

Selected Commerzbank Export Finance transactions


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Ready for your business …

COMMERZBANK Aktiengesellschaft

Cathrin Karpinski

Head of CEE, Russia & CIS

Export & Agency Finance Frankfurt

Tel. +49 69 136 23770

[email protected]

Unexpected viewpoints.

Radical thinking.

Inspiration.


This presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include, inter alia, statements about Commerzbank’s beliefs and expectations and the assumptions underlying them.

These statements are based on plans, estimates, projections and targets as they are currently available to the management of Commerzbank. Forward-looking statements therefore speak only as of the date they are made, and Commerzbank undertakes no obligation to update any of them in light of new information or future events. By their very nature, forward-looking statements involve risks and uncertainties. A number of important factors could therefore cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, among others, the conditions in the financial markets in Germany, in Europe, in the United States and elsewhere from which Commerzbank derives a substantial portion of its revenues and in which it holds a substantial portion of its assets, the development of asset prices and market volatility, potential defaults of borrowers or trading counterparties, the implementation of its strategic initiatives and the reliability of its risk management policies.

In addition, this presentation contains financial and other information which has been derived from publicly available information disclosed by persons other than Commerzbank (“external data”). In particular, external data has been derived from industry and customer-related data and other calculations taken or derived from industry reports published by third parties, market research reports and commercial publications. Commercial publications generally state that the information they contain has originatedfrom sources assumed to be reliable, but that the accuracy and completeness of such information is not guaranteed and that the calculations contained therein are based on a series of assumptions. The external data has not been independently verified byCommerzbank. Therefore, Commerzbank cannot assume any responsibility for the accuracy of the external data taken or derived from public sources.

Disclaimer


Export Financing – from a bank‘s perspective - Aga Portal

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