Download collque coface 2004 partie I VA

NEW CHALLENGES FOR ECAs OPERATING IN
EMERGING / FAST GROWING MARKETS
Ahmet KILICOGLU
September 13, 2007
(Prague, Czech Republic)
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CHANGING ENVIRONMENT FOR ECAS - 1
ECAs confront substantial changes in business environment
 Tough competition (private insurers in ST)
 More experience and technology brought in by the private
sector
 Shift from standardized products & basic business model
 Requirement for more sophisticated/tailor-made solutions
 Customer satisfaction concern
 Sharper questioning from own governments about proper role
of public sector especially after EU Directives
 Increasing pressure from NGOs on ECAs
Prague 2007
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CHANGING ENVIRONMENT FOR ECAS - 2
★
European ECAs set up subsidiary organizations to
separate their “government account business” from
export credit business.
★ Government-backed export business shrinks in the total
export volume in major exporting countries.
★
WTO requirements for ECAs to “break-even”.
★
Changing nature of borrowers in export credit
business from project and commercial borrowers
rather than governments.
★
Mandate of guardian authorities to support SMEs.
Prague 2007
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CHANGING ROLE OF ECAs
★ Official ECAs are mostly left with:
 longer maturities
 riskier countries/risks
★ ECAs will remain critical financial partners/financiers in
taking M/L-T risks in developing countries.
Prague 2007
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DISTINCTION BETWEEN DEVELOPED &
DEVELOPING COUNTRIES’ ECAs
★ Missions are same
★ Developed country ECAs more flexible – more
financial resources, technology
★ Developing country ECAs – continue traditional role fill in the gap of their banking sector– cover ST – have
to pursue the export-led growth strategies of own gvts.
Prague 2007
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CHALLENGES FACING THE DEVELOPING
COUNTRIES’ ECAs
★ Risk diversification
★ Left with high risk – long maturity
★ Rules to be followed
(WTO, OECD, EU Directives, Paris Club)
★ Break-even mission by own gvts
★ High pressure from own gvts for efficient utilization of limited
public resources
★ Less flexible to adopt to changes (products, technology,
experience)
★ Direct lending, insurance & guarantee functions together
Prague 2007
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TURKISH CASE - TURK EXIMBANK
★Export-led growth strategy of all gvts; establishment
of Turk Eximbank in March 1987.
★Immature financial market – indispensable in times of
crisis - Direct lending, insurance and guarantee
functions, ST being highest portion
★Turkey – WTO Member, OECD Member, EU Candidate
★Customs Union with EU as of Jan. 1996; issuance of
Communiqué (Export 96/12) for “Officially Supported
Export Credits” parallel to major disciplines of the
OECD Arrangement.
June 2006
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GENERAL FINANCIAL OUTLOOK
For 2006;

Total Assets
: $ 2.9 billion

Total Loans / Total Assets
: 82 %

Capital Base
: $ 1.63 billion

$ 3.5 billion in loans and $ 4.3 billion insurance cover
Total $ 7.8 billion support (9 % of the Turkish exports)

Rating: Same as the Turkish Treasury :
Standard & Poor’s
: BB-, Stable Outlook
Moody’s
: Ba3, Stable Outlook
Prague 2007
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THE TURKISH EXPORT CREDIT
INSURANCE MARKET
★ Turk Eximbank- sole official export credit agency – market
leader with the lion-share
★ 3 big players operating since recovery from crisis–
provide combined cover (export + domestic credit)
Result: less appetite from the market for export credit
insurance cover
★ Obligation of Turk Eximbank due from EU Directives in search
of removing distortions of competition due to state-aid 
seperate entity to be established
Prague 2007
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CHALLENGES FACING TURK EXIMBANK
★
Plan to set up a subsidiary entity for export credit
business along with supplementary products
★
Transposition of the EU Directives into national Law
(amendment of Bank’s Law ) –2 Directives under External
Relations Chapter
★
Rules to be followed (WTO, OECD, EU, Paris Club, Basel II)
★
Core business is mainly ST – reluctance of other financial
institutions
★
Gvt’s export policies – very high risk countries
Prague 2007
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CONCLUSION
★ ECAs will always be critical financial partners /
financiers for high-risk countries/ business.
★
ECAs of developing countries are indispensable
actors for their economies.
Prague 2007
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THANK YOU !
June 2006
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