JP Morgan

Corporate Treasury & FX in Colombia, Chile & Peru

Report date: 
4 Mar 2025

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Topics covered in this report: 
Tax, Bank Relationships, Working Capital, Factoring, Payments - domestic, Payments - cross border, Payments-digital, payroll, Cash Repatriation, Hedging FX
Service providers discussed in this report: 
Banco Davivienda, Banco de Chile, Banco de Bogotá, Banco de Credito del Peru, Bank of America, JP Morgan, BBVA, Santander, Citi, Yappy

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Corporate Treasury & FX in South Africa

Report date: 
18 Feb 2025

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Topics covered in this report: 
FX, Hedging FX, Bank Relationships, Cash Pooling - domestic, Netting, Cash Repatriation, Trapped cash, Intercompany loans, Collections - domestic
Service providers discussed in this report: 
Standard Chartered, HSBC, Citi, Standard Bank, First National Bank (S Africa), JP Morgan

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Managing KYC & AML in Corporate Treasury

Report date: 
27 Jan 2025

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Topics covered in this report: 
KYC, AML
Service providers discussed in this report: 
Citi, Société Générale, ING, BNP Paribas, JP Morgan

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Corporate Treasury & FX in Argentina

Report date: 
7 Nov 2024

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Topics covered in this report: 
FX, Hedging FX, Trapped cash, Cash Repatriation, Investments, Blue chip swap, Collections - domestic, Banking, Inflation
Service providers discussed in this report: 
JP Morgan, BBVA, Citi, Grupo Financero Galicia

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Plans & Experiences with AI in Cash Forecasting

Report date: 
17 Sep 2024

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Topics covered in this report: 
AI, Cash forecasting
Service providers discussed in this report: 
TIS, Cashforce, Kyriba, SAP, FIS, JP Morgan

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China Cash Pooling - Approaches & Experiences : Corporate Treasury

Report date: 
8 Jul 2024

This discussion explored the complexities of cash pooling in China, a topic that frequently arises in treasury conversations. While the goal was to clarify the regulatory landscape and operational requirements, the findings reinforced the reality that rules remain open to interpretation and can vary significantly depending on the bank and regulatory body involved.

Peers examined the key distinctions between domestic and cross-border pooling, the regulatory approvals required, and the different approaches banks offer. The discussion also touched on challenges related to tax considerations, currency exposure, and the evolving stance of authorities on approvals and compliance.

Rather than a single, definitive framework, the session highlighted the diversity of experiences and strategies companies use to navigate cash pooling in China. For treasurers managing liquidity across borders, this report provides critical insights into practical considerations, regulatory nuances, and emerging trends. The full version offers further details on bank-specific practices, tax implications, and risk management approaches.

 

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Topics covered in this report: 
Cash Pooling - cross border, Cash Pooling - domestic, transfer pricing, Bank Relationships, Entrustment loans
Service providers discussed in this report: 
HSBC, JP Morgan, PBOC, SAFE, ICBC, Bank of China, China Construction Bank, Citi, BNP Paribas, Shanghai Pudong Development Bank

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Brazil Corporate Treasury Update

Report date: 
27 Mar 2024

Commentary

Brazil is a success story. It often does not receive the credit it deserves, because it remains a difficult and complicated place to do business. But all the treasurers involved in this discussion have large and profitable businesses there – there was a time when most people lost money. On the political front, Brazil has recently seen both left and right wing governments, but both have respected election results, and the economy has continued to progress through it all.

Of course, it is not all rosy: though many rules and administrative processes have been relaxed, much complexity remains. In the past, a local treasury presence was required: it is now possible to run the country from offshore, though a specialist team may still be necessary.

The challenges discussed in the call:

  • Boletos: many customers in Brazil pay using boletos. These are a form of bill of exchange, where a document is prepared, usually by the seller, with all the payment information, including a barcode. This can then be presented by the payer in any location, and payment will be received by the seller in their bank account. This is a good system, but participants complained vehemently about the cost, and banks’ unwillingness to reduce the fees. Other issues:
  • Boletos are often cancelled when they are not paid on time and a new one is issued, instead of charging the intended late payment fees. 
  • Payment of a single invoice is often spread over several boletos, each with different due dates: this causes the very accounts receivable reconciliation issues the system is designed to avoid.
  • Boletos can be issued electronically (e-boletos): these reduce the amount of paper but, disappointingly, the fee reduction is not significant.
  • Some participants regularly do RFPs for this business, and frequently change banks. But fees remain high, and banks are often unwilling to continue.
  • Frequent changes in the process and rules present challenges in keeping the systems updated – this often results in manual processing.
  • One participant noted an improvement in service and processing efficiency.
  • PIX: the good news is that a form of on-line payment, PIX, is available and becoming increasingly popular, even for B2B transactions – and the fees are paid by the payor. The bad news is that the fees are also high, though not as high as for boletos. 
  • Tax payments: there is a requirement to maintain accounts with many local banks to make payments to tax authorities around the country. One participant is very happy with a JPMorgan tool to manage this and eliminate the related local accounts. Another used this tool in the past, but is now achieving the same result with Citi.
  • FX documentation

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Topics covered in this report: 
Bank Relationships, FX, Hedging FX, Receivables, Boletos, payroll, PIX, Tax, Supply Chain Finance
Service providers discussed in this report: 
Bradesco, Itau, Citi, Bank of America, JP Morgan, Santander, FXall

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Managing Bank Relationships in Japan

Report date: 
18 Mar 2024

Commentary

With complex countries, we usually think of emerging markets. Japan is one of the most advanced, largest and affluent economies in the world – but it is also a very complex place for foreign companies to operate in.

Usually, the complexity for treasurers comes from regulation. In Japan, this is not the case: the yen is freely traded in one of the deepest markets; cash can be pooled and swept both within the country and across borders; one participant does POBO there; Japanese banks willingly report transactions and balances by MT 940; it has deep and open capital markets; and four of the world’s twenty largest banks by assets are Japanese. Instead, the complexity comes from a very strong culture, which is often not well understood by non Japanese, and which leads to a different way of doing business.

This call, which was well attended and quite animated, went into the challenges foreign treasurers face in this environment. Peers raised the following:

  • High bank fees: Japanese banks are reluctant to negotiate these down
  • Japanese banks are not used to RFPs for cash management – this is not how the domestic market operates. Many large Japanese companies have strong historical relationships with their banks, which often involve minority shareholdings.
  • While MT 940s are not an issue, one participant faced significant issues getting their Japanese bank to implement even a simple host to host communication
  • Communications challenges: it can be difficult to find Japanese employees who speak good English – very few bankers in domestic operations speak it.
  • The need to carefully manage business meetings: these are usually more formal than in many other cultures: deference to senior personnel is required
  • Difficulty managing onshore operations from a remote location: the local online banking tools are nearly all Japanese language only
  • The language issue is further complicated by the katakana character set
  • Resistance of local teams to change, especially if it involves working with foreign banks
  • Complexity in managing relationships and wallet share with Japanese banks, who are often key global providers of credit and FX
  • The use of company chops instead of signatures, and the related control issues
  • The requirement to use local bank accounts for certain types of tax payments
  • Security and confidentiality in Japanese online payment systems is not best in class – one participant had an issue with a single person (not in HR) making all payroll payments
  • Repatriating cash via dividends and intercompany loans is not a problem, but it brings the usual complications: the need for retained earnings (one participant’s business receives advance payments), withholding tax and currency hedging cost. 

How to handle these problems?

  • One peer did an RFP a few years ago, and awarded

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Topics covered in this report: 
Bank Relationships, Intercompany loans, Dividends, POBO/ROBO, RFPs, Cash Pooling - cross border, Cash Pooling - domestic
Service providers discussed in this report: 
Bank of America, JP Morgan, MUFG, Mizuho, SMBC, Citi, HSBC, Standard Chartered, Deutsche Bank

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