Banco Regional, Bancolombia join IDB trade finance facilitation program

The Inter-American Development Bank ( IDB) has announced that Colombia's and Paraguay's largest banks, Bancolombia (NYSE: CIB) and Banco Regional, respectively, have joined the IDB's trade finance facilitation program (TFFP) as issuing banks. Under the TFFP, the IDB extends guarantees to cover letters of credit, promissory notes, bid bonds, performance bonds, advance payment bonds and other instruments used in international trade transactions. As trade financing is a core activity of Bancolombia, its participation in the TFFP will be instrumental in expanding its trade finance activities, the IDB said in a press release. Last year, Bancolombia joined the TFFP program as a confirming bank. The TFFP can help Banco Regional to further increase its trade finance business and to take advantage of the TFFP's countercyclical effects during times of volatility in trade finance flows, the multilateral said in a separate release. Launched and rolled-out in 2005, the TFFP is an effective tool for the IDB to support economic reactivation and growth through the expansion of financing available for the international trade activities of Latin American and Caribbean countries. The TFFP currently comprises a network of 203 confirming banks belonging to 74 different international banking groups in over 55 countries, and 49 issuing banks in 15 Latin American and Caribbean countries with over US$869mn in approved credit lines. To date, the IDB has issued guarantees for over US$488mn in support of 619 individual international trade transactions totaling US$636mn. Encarnación-based Banco Regional has more than US$574mn in assets, and 23 branches. It is mainly a corporate bank, with selective retail banking for individuals in the southern region of Paraguay; trade finance is a vital component of the bank's financial services as most of its clients are importers and exporters. In October 2008, Banco Regional became the system's largest player by acquiring the local unit of ABN Amro from Spanish bank Santander (NYSE: STD). Bancolombia has US$17.5bn in total assets, 715 branches and offices, and 13,548 employees.