Commodities - trade finance
After having read some reports about commodity trade finance and the few topics on this forum, I still have the impression I miss something about trade finance. It seems to me that positions related to trade finance are like very administrative oriented and contract focused (Letters of Credit, Standby Letters of Credit). I know that it implies to be very reactive, but in the end is it a challenging carreer ? What makes the job stimulating, as from my point of view dedicating large portion of times to contracts can appear to be repelling ? Perhaps there is something I miss.
Many thanks for your answers.
In my opinion, no not really all that intellectually stimulating but that's the thing it is just my opinion and you can 100% find people who are interested by it. My guess is the appeal if I were to do it would be in doing credit risk analysis so looking into the finances of a company to build their risk profile so that could be interesting or in building out risk models centered around financing which could be interesting. That said I get the impression that those folks working in those departments just plug in numbers from an already made model to use so you would have to take the initiative to make it interesting on that front, Also if you are looking at contracts you could find it cool since it's like being a lawyer and you are looking into contracts when things end up going wrong to figure out if you can find anything in your deal to compensate you. Idk this is me spitballing on what could make trade finance interesting but I would much rather go for a "stress" job in logistics if I was doing that to get my feet wet in commodity trading world.
Always struck me as something more interesting as a "I need to slow down" exit op, at least if you can be on the relationship management side. Which is historically how the industry developed, rich merchants with a bunch of cash realized "hey lending money to other traders is way less work and stress." Not sure that happens much in practice nowadays, but I feel like trading experience would put you way ahead of the competition.
The "modelling" and credit analysis aspects are pretty basic unless you are doing really structured stuff. I don't see much interest outside of relationship management, or developing new structures (which is happening with ESG etc...)
Commodities trade finance is going through a tough period right now (see Hin Leong and all the banks pulling back) but it's a bit hard to predict the demise of what is one of the oldest functions in banking.
Any ideas on pay? Is this similar to tradition S&T functions
I highly doubt that, probably a good bit less than traditional IBD or S&T, but your hours/stress are also way less. I suspect it's more of a 45-50 hour workweek type job.
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