Fimbank’s exposure to emerging markets is trade finance-related and of a short-term nature – two factors which mitigated risks substiantially – and Libya confirmed this position very strongly, president Margrith Lütschg-Emmenegger told The Times Business.
“The transactions that are related to Libya are all very short-term, usually guaranteed by financial institutions which have an excellent track record of payment,” Ms Lütschg-Emmenegger stressed.
Fimbank, the trade finance bank headquartered in Malta and modelled as an emerging market specialist, is among the companies listed on the Malta Stock Exchange which have been affected by dampened investor sentiment due to the Libya crisis. Fimbank reports on its full-year results today.
Asked for her message to Fimbank’s shareholders, Ms Lütschg-Emmenegger added: “Short-term transactions are more manageable and risks can be more readily mitigated. The financial institutions involved would most likely cover their international obligations in order to maintain their reputation overseas. This was evidenced in other circumstances when there was an embargo against Libya.”
The president pointed out Fimbank was very diversified in its investments and activities, an attribute which also mitigated risk substantially. She conceded soaring oil prices were beneficial to some markets and more challenging to others, but the bank would, in balance, benefit while managing its activities “with the appropriate products and regional approaches”.
Fimbank, however, would be presented with new business opportunities as Libya and the wider region took on a new guise and individual economies’ needs changed.
“Fimbank enjoys a corporate customer base which is ideally positioned to provide the necessary products and services to the region,” Ms Lütschg-Emmenegger pointed out. “The group has the necessary product mix, experience and expertise to assist suppliers in their financing requirements.”
The president said the bank was monitoring the situation in the area very closely and hoped to see new governments eliminating barriers at the border for goods traded. It was also anticipating increased participation by these countries in the international economy, for the benefit of their own economies and the well-being of their people.
“The direction which the new governments will take over how their economies will participate in the world economy, as well as their internal economic management and re-structuring, will be the critical determinants of their economic progress,” the president pointed out.
“We believe that Fimbank, with other similar financial institutions, will play an important part in the further development of trade activities in this region.”