HSBC launches €75 million Malta ‘Trade for Growth Fund’

HSBC Bank has announced a new €75 million Malta Trade for Growth (MTFG) Fund following the success of the first €50 million trade fund launched in December 2013.

The aim of the €75m MTFG Fund is to help Maltese companies take their business beyond Malta to new frontiers and achieve international growth thanks to the HSBC Group’s ability to capture value from its global presence, in particular through the creation of new trade corridors in the emerging markets.

The first MTFG Fund, launched in 2013, was snapped up by eager businesses in just under a year in what stands as a clear demonstration of the Maltese businesses’ desire to grow globally. A number of businesses in various economic sectors benefited from the first €50m fund.

During the launch of the second tranche of the MTFG Fund, HSBC Malta also unveiled its “Why Malta?” video on Malta in five international languages: Arabic, French, German, Italian, and Mandarin – in addition to the already-available English version. The video promotes Malta as a business destination and highlights the way HSBC can help businesses set up base in Malta as well as local businesses to thrive internationally.

The launch at the Saluting Battery at Upper Barrakka Gardens was led by finance minister Edward Scicluna, who was joined by HSBC Malta CEO Mark Watkinson, head of commercial banking Michel Cordina, head of global banking and markets James Woodeson, and a number of invited guests.

“The €75m fund helps investors, traders and businesses in Malta to flourish by connecting them to international trade opportunities, particularly within growing and emerging markets and also by encouraging international investment in Malta. This fund and the ‘Why Malta?’ video are aimed at continuing to support the Maltese economy to prosper,” Cordina said.

In fact, from an average of 1.5% annual growth between 2012 and 2014, world merchandise trade should increase by about 8% a year from 2017, according to a recent HSBC Trade Forecast report. Trade growth is set to accelerate on emerging market rebound and a series of game-changing trade liberalisation agreements.

“With offices on the ground in 60 markets, and more than 7,000 relationship managers operating worldwide, HSBC is in a unique position to connect potential customers in new markets, provide local insight through people on the ground, and offer the financial support for businesses to expand globally,” Cordina added.

HSBC Malta CEO Mark Watkinson spoke about Malta’s strategic location in the Mediterranean. “Malta’s location is very close to one of the world’s largest trade corridors, connecting Asia, the Middle East and Europe. HSBC has a role in supporting Malta’s growth and adding value to its economy, as well as using its global connectivity to help companies prosper at home and overseas. This fund is yet another step in the right direction to place Malta on the global trade map.”

The MTFG Fund offers customers a number of incentives such as the waiver of the fee related to the first documentary letter of credit for those new to HSBC Malta’s Trade Finance. A reduction in effective interest rate of up to 50 basis points applies on Trade & Receivables Finance facilities. In addition, a 20% discount is provided on the opening and advising fees on documentary letters of credit to or from emerging markets. Other incentives relate to the waiving of the administration fee for finance against trade export or import facilities for trade with emerging markets, as well as discounts on Receivables Finance and preferential rates on Foreign Exchange, including currencies such as the Chinese renminbi (RMB).

As part of HSBC Group, HSBC Bank Malta is the only bank on the islands offering Direct Trade Settlement in RMB. The bank is well positioned to assist customers wanting to carry out transactions in RMB as well as facilitate trade through this currency, as part of the MTFG initiative. Aside from creating new trade avenues, the growing use of China’s currency worldwide is also generating capital investment and financing opportunities for companies doing business internationally. This was confirmed in a recent HSBC Commercial Banking survey on RMB, which stated that in the global race to develop trade links with China, readiness to do business in RMB could give countries’ exporters a vital edge over their rivals.

“One aspect of the fund which is unique is the ability to assist our customers to make the best decisions around Foreign Exchange. Through our innovative tool known as GetRate, clients can get real-time exchange rates straight from the heart of the bank’s global trading floors in London, Dubai, New York and Hong Kong,” James Woodeson said.

“The growing influence of China and its currency, the RMB, is a reality nowadays and this is reflected in HSBC Group’s strategy of capturing growth opportunities in the Asian markets. HSBC Malta is here to assist local companies wanting to be part of this growth.”

In the coming weeks and months, HSBC Malta will be organising a number of masterclasses as well as thought-leadership events to promote the benefits of MTFG and global growth opportunities