Q1: Rolf, you are Head of Trade Finance in Sydbank in Denmark. Could you please tell us about your responsibilities in Sydbank.
 

I am responsible for all activities within documentary trade finance (such as collections, guarantees, letters of credit as well as export finance) in Sydbank. My primary task is to ensure that all orders from our import- and export customers are carried out correctly and as rationally as possible. Although I'm not directly involved in the sale of the mentioned products, the staff of our department and I support the bank's business consultants as well as our corporate customers with advices and proposals every day.

I started my career within this interesting area back in 1981, where Sydbank decided to establish a letter of credit department. Before that time letters of credit from and to our clients were processed through other banks. At the end of the 80s and at the beginning of the 90s we centralized the processing of collections and guarantees as well. The original name, i.e. “Letter of Credit Department” was temporarily changed into “Documentary Department” and later into the now extisting “Trade Finance”.

Facts about Sydbank:

Sydbank was established in 1970 through a merger of four local banks in Southern Jutland. Between 1980 and 1994 Sydbank acquired several banking activities from other banks and established branches in Germany. Business volume increased rapidly. In February 2003 Sydbank established its subsidiary bank, Sydbank (Schweiz) AG, in Switzerland – an expansion of the Bank's concept of private banking.

Sydbank is divided into 15 regions and has currently 113 branches in Denmark. All regions offering all-round banking activities. The market share is around 5%. The Bank employs a staff of 2,100 (full-time equivalent) and has 335,000 customers, including 20,000 corporate clients.

Q2: You and I know each other from the ICC. We are both member of the Banking Commission as well as the national committee. In that respect it seems to me, that there is one difference in the fact that I am only responsible for the bank that I work for – but you have a responsibility besides that. Can you tell us what that is.

Actually I’m elected to represent “Rembursklubben” (English “Danish DC-club”) .This club was founded in 1985 by a small group of foreign banks in Denmark. The only goal was then the correct interpretation of the UCP400, which had just entered into force at that time. The idea of the club attracted very quickly many other small and medium sized banks. The number grew to more than 25 banks over fewer years. Due to mergers and as some foreign bank’s branches disappeared in Denmark the number declined and counts actually 18 banks, however I think that the member banks represent approx. the same “market share” as in the days where the club had 25 or more members. We joined the group already in 1986 and we have never regretted that membership. It is indeed an outstanding possibility to exchange views with colleagues in other banks with similar problems and situations.
 

Q3: How long has this “club” existed?

More than 21 years. In the very beginning only matters relating to letters of credits were discussed. Now we have issues on almost all products relating to Trade Finance. The spirit of the club, however, is still the same. We are a non political group; we are both competitors and partners. Thus, we do, of course, not discuss special pricings or reveal business secrets.

Q4: How often do you meet?

We meet twice a year – spring and autumn. The participating banks play host by rotation. Sydbank has been host 4 times, the next time probably in the spring of 2008.

Q5: What is your role at those meetings?

In 1991 the club applied for a seat in the Banking Commission and we elected a representative for the club. Even I have to emphasize that the club is a non-political group, the representative’s task is to maintain the club’s interests, but “What are the interests”? There are several. In my opinion the most valuable advantage of having a representative is the fact, that the group members are very quickly informed of recent ICC-activities and initiatives on Trade Finance and specifically of published opinions by the ICC Banking Commission. I’m personally very satisfied with new official opinions as soon as they are released. I remember that in the early 1980ies we got opinions approx. two years after their release – very, very unsatisfactory. I know time has changed. Nowadays you have several ways to get information more quickly. However, the opportunity to participate directly (through the representattive) is the best.

As mentioned, information about opinions is a regular item on our agenda. In the past we have spent a lot of time on information about the preparation of the ISBP and now about the ongoing revision of the UCP500.

It is also possible that club members would like to submit a query to the Banking Commission for a formal opinion or there could be another issue which members would like to have discussed with experts. The representative has opportunities of meeting experts from other banks. Personal knowledge counts very much in this position. That’s of benefit to all club members.

Q6: Besides informing about the meetings in the Banking Commission, are there other topics usually on the agenda?

A typical agenda could be as follows:

1) Lecture by a guest speaker

2) Information from the ICC-representative

3) Cases

4) Lunch

5) The day after “company visit”

Ad 1) since transport- and insurance documents play a very important role when you talk about examination of documents, we have on several occasions invited experts from the transport and insurance sector. Even these experts do not always agree to our points of view, it is an advantage for every document checker to have knowledge to these areas at some level. In some cases we have guest speakers from the industry- banking or even IT-world.

Ad 2) as mentioned

Ad 3) before each meeting the participating banks may send queries to the host bank. Queries are collected and sent to all participating banks a few weeks before the meeting. Sometimes there were so many queries that we almost forgot the lunch. Sometimes we have time to study cases more thoroughly. The banks which have “a case” present the case and the floor is then open for comments and discussion. Unlike the queries taken up in the ICC Banking Commission, we do never have a “formal opinion”, but participants can listen to the arguments in the discussion and in most cases there will be a majority for the one or other interpretation. Sometimes, it happens that the interpretation is a split one.

Ad 4) during lunch and in the following hours the discussion of cases and other issues of interest continue. As a newcomer in my younger days I profited much by this part of the meeting. Not only by gaining additional knowledge through discussion of various matters. I also came into closer personal relations with other participants, which made it possible for me to ask a (perhaps) more experienced participant for an advice or a point of view at any time.

Ad 5) the host bank usually arranges a visit to one of its customers. This part of the meeting is always kept as a secret. No one except from the host knows anything about the company to visit. We have visited companies such as producers (and/or traders) of windmills, fish meat, shrimps, caviar, machines of various kind and wine and transport companies. (Always very, very interesting).

The companies are often (but not at all exclusively) firms, which uses products from the Trade Finance area. The participators can then get the firm’s views on different issues, hereunder issues related to documentary credits. The host has completely free hands. It also happened, however not very often, that the company visit was replaced by some sort of sight seeing.

Q7: What is the value of this club for the participating banks?

Each member bank pays an annual membership fee. This fee is primarily intended for a contribution to the representative in connection with the semi-annual ICC Banking Commission meetings.

For a relatively small amount the participating banks get all the information stated above. Beyond that you have a network of people who have the same business problems.

Q8: What would be the consequence for you and the other participating banks, if this club did not exist?

As I already mentioned you have many sources to get useful information, nowadays. However, if Sydbank had not joined the club I would not be a member of the ICC Banking Commission and consequently I and the other participants would suffer a lack of lot of information. I consider it a serious consequence if the said information was available to other banks and not Sydbank. The most terrible thought to me is, that you could lose one or more customer’s Trade Finance orders due to lack of necessary skills to handle them.

Q9: I am not aware that a similar “structure” exists elsewhere. Would you advise other countries to adopt this idea? Why - why not?

In the light of the above, you can imagine that I strongly recommend the idea of the club. In my opinion one of the club’s internal main driving forces is the participating member’s activities regarding the exchange of views and the discussion of cases. Due to the above reasons I consider it very important for the club to be represented in the ICC Banking Commission.