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Global turbulence increases business and corporate customers’ need for good advisory

Corona and the war in Ukraine have given rise to greater uncertainty in the export markets. This means that demand for advisory regarding how business and corporate customers best safeguard themselves against, for example, inflation, currency turbulence and longer delivery times, has increased in Danske Bank.

While interest rates in the latter 2010s were unheard low and global supply chains seemed to function smoothly, Nordic businesses could put most of their focus on other areas than those related to currency fluctuations and supplier challenges. This has changed now that inflation and interest rates have gone up and supply chains and energy supply are under pressure.

Six months after the outbreak of the Ukraine crisis and a pandemic that is still present, Global Head of Markets and Transaction Banking, Claus Harder, makes a status:

"In the past, companies could act more mechanically and to a larger degree predict what was around the next corner, since risks were well known. Now things are changing faster, and as a business you have to be more active with your risk management and remain on the ball all the time."

”As you know, the Ukraine war has disturbed the supply chains, among other things, on energy, which gives a direct increased risk. But in addition, the war has also made the world more uncertain in general. Hence, risk has come to countries and regions that have for many years been considered low-risk, insofar that poor infrastructure or government interventions did not have to be taken into account,” says Claus Harder.

Things move fast these days, so businesses must remain on the ball all the time.

Claus Harder

Global Head of Markets & Transaction Banking,
Danske Bank

Increased demand for our insurance related products
The global turbulence means that Danske Bank’s export related insurance products, such as trade finance and guarantees, have again become more popular, just as the bank’s macro economists spend more time on global economy, sharing insights with customers.

“Risks have now increased in Eastern Europe, for example, where the crisis in Ukraine has lifted insurance premiums so that they are now much higher than in EU countries. The same applies to a number of countries around Turkey and, of course, also in Taiwan,” says Claus Harder.

Claus Harder does not expect that interest will decline in the near future.

“It’s the big picture changing. Whether the storm of events we are seeing right now settles a bit, inflation is higher than we have seen for 20 years, so uncertainty about the economy will remain for a while still,” he concludes.