China

Regional Bank Relationships in Asia

Report date: 
2 Jun 2022

Commentary

The way treasurers manage banking relations provides a key insight into how they approach their job. This session was no exception – and we had the additional benefit of input from senior banker in Asia and Advisory Board member John Laurens, who shared his view from the other side of the fence.

  • Nearly everyone had the same goal: try to get the most efficient banking structure.
  • This nearly always involves a general preference for dealing with core international relationship banks over having many local relationships
  • However, one participant commented that local banks in Asia often have excellent technology and services – but it is difficult to get HQ to agree to go with them
  • In any case, there are many situations where local banks are still required, to support tax payments or local payment systems. China, India, Korea and Japan were the countries where this was most frequent.
  • In awarding business to banks, most companies tend to give a preference to the institutions who participate in credit facilities. Exceptions were made when justified by a specific service, but this could become an issue when credit needs increased.
  • Several participants have either recently restructured their banking relationships, or are currently doing so. Comments:
    • It is very important to get the local team on board. They will usually accept the outcome and help if they own the decision, and can see clear benefits.
    • The RFP process is useful, but it is important to carefully check the responses. One participant found that banks often tried to sell capabilities they did not yet have – it is important to focus on what they can deliver today. They also found it was beneficial to use...please sign in to continue reading
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Topics covered in this report: 
ASEAN, Bank Relationships, RFPs
Service providers discussed in this report: 
Citi, JP Morgan, HSBC, Deutsche Bank, Bank of America, Standard Chartered, ICBC, DBS, Bank of China

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Treasury & FX in Russia

Report date: 
30 Jan 2019
  • Documentation – complex, time consuming & critical
  • Inter banks – 2 way pooling is available in theory but not at all straight forward in practice
  • Find hedging banks- operating outside to inside
  • Sanctions are very specific – details are key and need to be looked at closely
Topics covered in this report: 
Cash Pooling - cross border, Hedging FX, Sanctions, Zero balance accounts
Service providers discussed in this report: 
Rosbank, VTB, Sberbank, PNC, Commerzbank, SWIFT, LexisNexis, Citi

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Treasury & FX in China

Report date: 
14 Mar 2019

Included in this report: Entrustment pools, cross-border pooling, electronic BADs

Topics covered in this report: 
Entrustment loans, Bankers Acceptance Drafts, KYC, Invoicing, Cash Pooling - cross border, Cash Pooling - domestic, Bank Relationships, Supply Chain Finance, Funding
Service providers discussed in this report: 
SWIFT, ICBC, Bank of China

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Treasury & FX in China

Report date: 
25 Sep 2019

In this report: Netting, pooling, supply chain finance, customs guarantees, cash repatriation, Hedging, Local v International banks and T&E

Topics covered in this report: 
Netting, Cash Pooling - cross border, Cash Pooling - domestic, Customs, Cash Repatriation, Dividends, Hedging FX, Funding, T&E Management, Supply Chain Finance, Bank Relationships, KYC
Service providers discussed in this report: 
Alipay, WeChat Pay, ICBC, Bank of China, China Merchant Bank, Standard Chartered, Union Pay, HSBC, Citi, JP Morgan

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China Treasury Operations Update

Report date: 
21 Feb 2022

Commentary

This was a slightly different call on China. Instead of getting into the nuts and bolts of how you make your cross border cash pooling work, the aim was to get feedback on the current business situation, and how participants find the operating environment is evolving in the light of COVID and increasing geopolitical tensions.

Overall, there was no sign of a significant impact coming from trade tensions. Many companies are diversifying their sourcing and manufacturing footprints to increase resilience, but this is due to COVID and usual prudence, as much as political tensions.

COVID has resulted in travel to the country being suspended. This has aggravated the communications challenges which already existed – but the general view is that this is life, and must be accepted and worked on. Several participants said they never expect to be allowed to travel again – so Zoom skills will be essential going forward.

Logistics are a challenge in China, just as they are everywhere else, simply due to the shortage of vessels and vehicles. One correspondent said this is causing delivery deadlines to be missed, which is having a knock-on impact on payment timeliness and customer credit. In turn, this raised the issue of credit insurance, which was proving difficult due to a...please sign in to continue reading

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