Real Time Treasury: Closer than you think?


Rethink Treasury II

Damian Glendinning talks to Steve Monaghan, General Partner at FinMirai and Simon Jones, chief customer officer to ClearBank and member of the CXC advisory board about the possibilities for real time treasury.

This post comprises a recording of their conversation.

Also in this series:

Rethink Treasury technology

Real time treasury – closer than you think?

Using fintech to solve a real problem.

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Cash Repatriation from India

Cash repatriation from India

Call date: 2nd June 2020

Members shared their experiences in repatriating cash from India, including, Dividends, management Fees, Royalties, Intercompany netting, domestic pooling and Mauritius structures.

The call was chaired by Damian Glendinning, whose commentary appears below.

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Chairman’s commentary

India has always been a difficult and highly regulated environment. However, over the past few years, a lot of treasury actions which used to be very difficult are now possible. The country continues to have one of the region’s more aggressive tax regimes – they are particularly focused on transfer pricing – and there are still many regulations which are not always clear, and change regularly, but still have to be complied with.

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Regional Treasury Centres in Asia

Regional Treasury Centres in Asia

Call date: 21st May 2020

This report covers two calls with participation from members in Asia, EU and the U.S. who describe their regional treasury structures in Asia.

The call was chaired by Damian Glendinning, whose commentary appears below.

If you would like a copy of this report, please get in touch.

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Chairman’s commentary

The participants came from a wide range of companies, with approaches which covered more or less the complete spectrum, from a highly centralised in-house bank doing all execution of transactions on behalf of local subsidiaries, to a completely decentralised operation which has a treasury presence in each entity. As always, there is no single correct answer. Common themes:

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Time to Rethink Treasury Technology

Rethink Treasury 1

Treasury is stuck. Damian Glendinning challenges you to rethink your approach to treasury  & treasury technology.

This post comprises a presentation together with a write up of two peer group discussions on the issues raised with contributions from15 senior treasurers. (all below).

Also in this series:

Real time treasury – closer than you think?

Using fintech to solve a real problem.

Read More

Tracking Bank Exposures

Tracking Bank Exposures

Call date: 21st Apr 2020

The approaches companies take to measuring and tracking their exposure to different banks and what early warning signals they look out for. The call also included markets where formal ratings are unavailable. 

The call was chaired by Damian Glendinning, whose commentary appears below.

If you would like a copy of this report, please get in touch.

More on Bank Relationships

Chairman’s commentary

In the various sessions we have held on the COVID-19 crisis, we have heard that companies are drawing down on their credit facilities and issuing debt to ensure liquidity, while at the same time they are concerned about some banks and the ability of the banking system to withstand credit losses which could potentially occur as a result of business slowdown during the lockdown. This call was to explore these issues further.

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Re-booting China post COVID

Rebooting China after COVID

Call date: 30th Apr 2020

Members describe how their in country operations in China have recovered as the COVID citation in China eased.

The call was chaired by Damian Glendinning, whose commentary appears below.

If you would like a copy of this report, please get in touch.

Click here to view all our reports on China

Chairman’s commentary

China was the first country to lock down in response to the virus. It has also been the first one to start going back to work – at least, with a coherent response to the infection. The purpose of this call was to see how quickly business is resuming, and whether there are any ongoing impacts from the period of closure. It should be noted we did not have any participants from the industries which have been most affected, specifically travel and hospitality.

Overall, the feedback was positive:

  • Collections: these slowed down in March, often to zero. But they seem to be coming back: while customer credit risk is being closely monitored, alarm bells are not ringing.
  • Most manufacturing facilities are back on line, even if office staff continue to work from home in many cases.
  • Funding: everyone saw a reduction in their normal cash position in the country. For those who are cash rich locally, this is not a problem. Others resolved the issue by intercompany loans, using their cross border cash pools to send money into China, or leading and lagging intercompany payments. 
  • The increased use of intercompany lending raises regulatory issues: several participants reported obtaining approvals from SAFE in record time. The consensus was that the authorities are going out of their way to be helpful and supportive.
  • Logistics: there have been some issues across the board, as it has been more difficult than usual to move goods to and from factories. While this has caused some disruption, and led more than one company to reconsider the structure of their supply chain, all reported that the issues are manageable, and being managed – though concern remains.
  • Unsurprisingly, companies with export oriented manufacturing locations in China are now reporting slowdowns due to reduced demand from Europe and North America, since lockdowns have been implemented there. 
  • Direct retail sales were often reduced to zero, at least for non essential goods. However, this has been partially offset by increases in on-line sales.
  • Business continuity plans generally worked, with some inevitable learning. Predictably, any process which still depends on physical signatures (or chops in China) was problematic during the lockdown. Less predictably, some companies found themselves short of the laptops required for working from home.

Conclusion: at least in the short term, our participants report that they have weathered the storm well, and business is coming back relatively smoothly. We very much hope this continues to be the case, and that the same applies to other countries round the world as they come back on stream. Again, this discussion did not include participants from the industries which have been hardest hit, and we did not discuss the potential long term impacts, including debt levels.

Treasury & FX in Vietnam

Treasury & FX in Vietnam

Call date: 2nd April 2020

In this call, members discussed their approaches to treasury, FX and cash management in Vietnam.

The call was chaired by Nick Franck whose commentary is below.

Please contact us if you would like a copy of the full report (5 pages)

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Chair’s comments

Whether talking about FX hedging, liquidity or systems, it seems that international banks can do quite a lot in Vietnam. However, most companies need a local bank and with that comes documentation complexity and operational complications. A local presence helps but is not the cure. One participant described Vietnam as ‘Like China but China has evolved.’ Vietnam is likely to develop in future but it is not developed yet (according to our participants.)

Premium members can and subscribers can download the full report here.

KYC -Issues & Approaches

KYC – Issues & Approaches

Call date: 31st Mar 2020

The discussion focused on the current issues
treasurers are experiencing relating to KYC requests from banks and how they are dealing with them, including the merging of KYC and AML requests. Banks mentioned in this report: BAML, BMG, Citi, HSBC. ING, JP Morgan.

The call was chaired by Karen Van den Driessche whose comments are listed below.

If you would like a copy of this report, please get in touch.

More on Bank Relationships

Chair’s comments

  • It seems there is no real solution in sight for a more streamlined, automated, simple and automated KYC process
  •  KYC remains a manual, troublesome, time consuming and inconsistent process across and within bank groups.
  •  In addition lines between KYC and AML requests seem to be blurred.
  • Good news is that some banks are (much) better than others.
  • There seems to be a limited number of vendors daring to tackle the conundrum but SWIFT’s offering seems to be a good solution or alternative, albeit limited to SWIFT customers

Regional Treasury Centres in Latin America

Regional Treasury Centres in Latin America

Call date: 19th May 2019

Senior treasurers from EU, Latin America and the U.S discussed: What aspects of treasury and cash management in Latin America are centralised and what are the challenges and benefits of centralisation in the region?

The call was chaired by Damian Glendinning, whose commentary appears below.

Click here for other posts on Latin America

If you would like a copy of this report, please get in touch.

Chairman’s commentary

Any discussion involving Latin America and Latin Americans will always be lively, and this one was no exception – though one participant did point out that the definition of Latin America is not always clear. For some companies, but not all, LatAm includes Mexico and Central America, and in some cases it also includes the Caribbean. 

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Liquidity Action Checklist

Liquidity Action Checklist

Call date: 26th March 2020

We ran two Treasury Peer Calls, covering Asia, EU, Middle East & U.S. on how companies are managing their liquidity in the current (CV19) crisis.

The call was chaired by Damian Glendinning, whose commentary appears below.

If you would like a copy of this report, please get in touch.

More on COVID Treasury

Chairman’s commentary

We had two good sessions, covering Asia, Europe and the Americas. My thanks to everyone for their lively participation – and best wishes to all participants, their families and their teams for a healthy outcome to this crisis. 

While varying concerns were expressed, most teams seemed to be coping well with the crisis:

Business continuity plans have been implemented, and are generally working satisfactorily. All participants were working from home. Some were experiencing bandwidth issues, and were concerned about the transmission of large files with quarter- and year-end closings. No-one has found this to be a showstopper. 

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