Truist (TFC) Enters Partnership Deal to Reinforce Trade Finance
In an effort to strengthen trade finance capabilities, Truist Financial Corporation TFC has entered a partnership with Standard Chartered. This will create a seamless and efficient business environment for importers and exporters in the United States.
Trade finance refers to the financial products offered by institutions that seek to facilitate global trade by reducing counterparty risk between importers and exporters.
Standard Chartered will likely provide centralized processing, analytics and tracking services by leveraging its unique network, local expertise, infrastructure and technology.
Truist’s corporate and commercial clients are expected to benefit from Standard Chartered’s ability to fulfill their trade finance needs in the emerging markets in Asia, Africa and the Middle East.
Moreover, TFC will gain access to Standard Chartered’s footprint and ability to monitor transactions in real time for the entire value chain of documentary trade.
Clients of TFC will be able to execute performance and commercial contracts with counterparts in markets that require local knowledge and expertise in addition to local standby letters of credit (“SBLC”) delivery capabilities.
Chris Burtch, the head of financial institution sales at Standard Chartered Americas, stated, “We are proud to have a strong network across the world’s most dynamic emerging economies and regions, which have the U.S. as its major trade partner. This presents immense opportunities for companies looking to expand their reach and tap into these new markets. We are thrilled to be partnering with Truist and facilitate its clients’ cross-border trade finance needs across our footprint.”
Chris Ward, the head of wholesale payments at Truist, said, “Many of Truist’s corporate and commercial clients operate in the global economy and require solutions that allow them to complete transactions effectively across borders and throughout the supply chain. This partnership will allow our clients to more efficiently achieve their goals, scale their business, invest in their teams and build their communities.”
Like TFC, JPMorgan JPM has formed a strategic alliance with Cleareye.ai, a financial technology firm focused on trade finance. JPM’s investment in Cleareye.ai leverages the ClearTrade platform, solving the challenges faced by trade finance.
Over the past year, the ClearTrade platform was integrated into JPMorgan’s trade processing system. With the help of its alliance with Cleareye.ai, JPM will be able to further leverage the digitizing of documents using powerful image processing solutions with the ability to extract, validate and accurately classify unstructured data.
Notably, Truist has been focused on growth of non-interest revenue sources. The company is open to strategic business restructuring initiatives to further improve fee income growth. In sync with this, it divested a 20% stake in its subsidiary — Truist Insurance Holdings — for $1.95 billion in April 2023.
Also, to further bolster its insurance business, TFC acquired BankDirect Capital Finance, BenefitMall, Kensington Vanguard National Land Services and Constellation Affiliated Partners in the past few years. Apart from these efforts, Truist has acquired Service Finance Company, which has augmented its point-of-sale lending business.
Over the past six months, shares of TFC have lost 15.1% against the industry’s growth of 4%.
Image Source: Zacks Investment Research
Currently, TFC carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Efforts by Other Firms
Earlier this month, Apollo Global Management APO collaborated with Phoenix Holdings Ltd., a leading Israel-based insurance, asset management and financial group, for the deployment and co-investment of Phoenix client and corporate assets.
The initiative is part of both company’s ongoing joint efforts and will enable Phoenix to participate in up to $2 billion of investments as a strategic partner for Apollo in Israel. This collaboration provides access to high-quality and privately-originated global credit opportunities to Phoenix.
For Apollo, the agreement with Phoenix indicates its strategy of partnering with innovative insurance and financial institutions internationally to offer private fixed-income opportunities.
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