The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Trade finance default rates expected to rise with Covid-19 disruption

Naveed Sultan, head of treasury and trade solutions at Citi, says the overall default risk from coronavirus will remain low and will be limited to the SME sector.


Leaders are making uncompromising decisions to close national and regional boundaries to limit the spread of the coronavirus. Sudden limits to freedom of movement have slashed trade volumes and ruptured supply chains, forcing businesses to overhaul treasury functions at lightning speed to stay afloat.

Some banks are stepping up, supporting clients in their search for liquidity and credit to prop up their working capital. But trade finance – which was building momentum as a safe and solid asset class over the last few years – will become riskier as default rates inevitably rise, says Naveed Sultan, global head of treasury and trade solutions at Citi.

According to the International Chamber of Commerce (ICC), default rates between 2008 and 2018 across all trade finance products and regions were low, averaging 0.37% for import letters of credit, 0.05% for export letters of credit, 0.76% for import and export loans and 0.47% for performance guarantees.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree