SABB's Managing Director David Dew said: "We are proud of our association with the IFC and of our recognition for the second year running, as the most active
confirming bank in the MENA region under the IFC's Global Trade Finance Program.
Ameribank has been included in the list of EBRD
confirming banks.
Additionally, since the bank gets to choose the
confirming bank, everyone will be aware of which bank that is, meaning the risk of an injunction is still present in a confirmed LC.
Most African banks confront major hurdles in obtaining credit support from international
confirming banks to undertake sizeable transactions largely due to their relatively small capital bases.
confirming bank is an achievement, as Ameribank has been included in the list of EBRD
confirming banks.
Banque Paribas case, in which the court ruled that if a
confirming bank discounted its own deferred payment undertaking it did so at its own risk, and if fraud were established prior to the maturity date, the issuing bank was not obliged to reimburse the
confirming bank.
Confirmed Irrevocable Letter of Credit (CILC)--This transaction moves the financial responsibility for payment from your customer to the
confirming bank (preferably a US bank).
The
confirming bank creates the same obligation to the beneficiary as the issuing bank when the
confirming bank adds its confirmation.
This requires the
confirming bank to review the credit risk of the issuing bank and protects the exporter if either the importer or the issuing bank becomes insolvent.
IFC covers payment risks for 172 banks in 77 countries, under which, First Gulf Bank will register all of its branches and subsidiaries as a
Confirming Bank, which will allow FGB to undertake risk exposure in emerging markets private trade flows with the safeguarding of the IFC and its availing covers.
It is worth noting that FRB operates in Africa both as an originating institution and as a
confirming bank.
It is a long-standing partner of the EBRD, and became a
confirming bank under the TFP in March 2003.
