First bank worldwide to be granted the confirming and issuing bank status

FIMBank, a Maltese trade finance oriented bank, has been granted issuing bank status under the Global Trade Finance Program of International Finance Corporation’s a member of the World Bank Group. FIMBank already participates in the IFC programme as a confirming bank.

The GTFP was launched in 2005 to support the development of trade with and between emerging economies. Under the $500 million program, IFC offers full or partial guarantees to confirming banks participating in the GTFP, effectively taking on the payment risk of issuing banks in emerging countries. The GTFP guarantees are transaction specific, and apply to letters of credit, promissory notes, bills of exchange, bid and performance bonds, advance payment guarantees and suppliers’ credit for the importation of capital goods

“This is the first time since the establishment of IFC that an individual bank has been accepted on both the confirming and issuing sides of the programme,” Margrith Lütschg-Emmenegger, FIMBank’s President said. “The IFC is placing a great deal of trust in FIMBank. This is a show of confidence in both the Bank and in Malta.”

The IFC has also doubled FIMBank’s GTFP facility, raising it from $5 million to $10 million. This also follows the conversion of part of the IFC’s $10 million subordinated loan to FIMBank to shares in the company in October 2005. This move made the IFC the Group’s third largest shareholder with a 7.18% stake.

“What this means is that when an issuing bank in a riskier emerging economy of an IFC member country issues a letter of credit to cover a trade deal with our clients, FIMBank as the confirming bank can request IFC’s guarantee thus eliminating the commercial and political risk of the country and bank in question.” explained Ray Busuttil, Executive Vice President and Head of Business Development.