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HSBC Russia has launched a new service, issuing documentary credit in Chinese Yuan. «Ostin», a subsidiary of «Sportmaster» group of companies, was the first Russian company that took advantage of this new service. This product allows HSBC clients to agree more favourable payment terms under international contracts. Moreover, trade settlements in Yuan reduce currency risks for suppliers related to currency fluctuations.

The unique character of this offer lies in the combination of a documentary letter of credit and an ability to receive financing in Chinese Yuan. HSBC Russia can offer its clients the most favorable terms by funding in Chinese Yuan across both Shanghai and Hong Kong. This service also provides HSBC’s clients with an opportunity of deal structuring keeping the number of banks involved to a minimum. Karel Bures, Head of Commercial Banking, HSBC Russia, said: “Documentary Credit in Chinese Yuan offers new benefits for Russian companies and allows them to strengthen and deepen mutual relationships with their Chinese counterparts. In view of significant growth in demand for Chinese Yuan we see increasing demand for Yuan-denominated documentary credit as a method of payment under international contracts. In light of significant trade flow grow between Russia and Asian countries, we see HSBC being able to benefit from its strong presence in Hong-Kong and China”.

Dmitry Barkov, Head of Corporate Finance Department, «Sportmaster» Group, said: “First of all, HSBC Russia was selected for conducting international settlements due to a prompt documentary credit issuance. It normally takes between three days and two weeks on average, while with HSBC it takes one working day only. Moreover, Chinese suppliers tend to give preference to counterparties with settlements in Yuan and our company gets a competitive advantage in this region by using documentary credit in Yuan. Finally, HSBC’s brand enjoys special trust and confidence across Asian markets – from our experience there has never been a single case of a supplier requesting confirmation of a letter of credit issued by HSBC. The first deal with the use of a letter of credit in Yuan is an important milestone for HSBC in Russia especially in the context of recent developments of economic cooperation between Russia and China. The latest stage of this cooperation was the recent launch of a Yuan-Ruble trade on MICEX in December 2010. HSBC offers this new service as it recognises the significance of Yuan as a global currency. In December 2010 HSBC announced its first cross-border renminbi (RMB) trade settlement transaction in Russia for a subsidiary of «Sportmaster».

HSBC Group serves customers worldwide from around 8 000 offices in 86 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US $2,418 billion at 30 June 2010, HSBC is one of the world’s largest banking and financial services organizations. HSBC is marketed worldwide as ‘the world’s local bank’. HSBC Group operates in Russia through OOO HSBC Bank (RR). HSBC Russia provides a wide range of corporate banking, investment banking and financial markets products and services to corporate and institutional customers. In June 2009 HSBC Russia launched HSBC’s world-class retail offering. HSBC in Russia is also offering private banking and wealth management services with access to HSBC global resources.

bsr-russia.com, 27.01.2011