In 10 months, Ahli United Bank (AUB) granted an EGP14-15 billion worth of letters of credit to support Egypt’s exports and imports of petroleum and food sectors. The bank seeks to provide by end of the current year total letters of credit of EGP 20 billion.
Ahli United Bank’s L/Cs are short term, having a maturity of 3-6 months, a senior source from the bank told Amwal Al Ghad on Monday.
Backed by its extensive network of international correspondent relationships, the bank has successfully extended in providing letters of guarantee, letters of credit and collection documents, the source noted.
Furthermore, the source said AUB had supported several vital sectors in Egypt, notably foodstuffs, medicines and petroleum products, which enabled the bank to attract more prominent clients in the trade market.
AUB’s total volume of international transactions had reached EGP 20 billion approximately by end of 2013, marking an increase of EGP 6.3 billion, from EGP 13.7 billion achieved by end of a year earlier.
Letters of credit are often used in international transactions to ensure that payment will be received. Due to the nature of international dealings including factors such as distance, differing laws in each country and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade. The bank also acts on behalf of the buyer (holder of letter of credit) by ensuring that the supplier will not be paid until the bank receives a confirmation that the goods have been shipped.
