gtnews Commends 2011 Global Corporate Treasury Awards Winners

21 Sept 2011 

On 20 September 2011, over 120 guests joined gtnews at the prestigious One King West Hotel in Toronto to recognise the great and the good in corporate treasury.

The second annual Global Corporate Treasury Awards, sponsored by Bank of America Merrill Lynch (BofA Merrill), are dedicated to those treasurers that have proven their contribution to the success of their corporate's business. The winners are an outstanding cross-section of all that’s best in treasury. Paul Simpson, head of global transaction services, BofA Merrill, opened the ceremony by welcoming everyone to the event and congratulating all that had submitted an entry for the awards.

More than 60 corporate treasury departments from across the world entered the awards, including two new categories - Trade Finance and Green Treasury.

Figure 1: gtnews 2011 Global Corporate Treasury Awards Winners

Winners (from left to right): Conor Leydon, Managing Director, Omnicom; Ed Scott, Corporate Treasurer, Caterpillar; Richard Moore, Manager, Commodity and Supplier Risk, Caterpillar; Hany Naguib, Corporate Sales Executive - Canada, BofA Merrill; Jean Furter, Vice President Treasurer, Brocade; Svend Mejdal, Director, TMT Client Sales Management, Citi (on behalf of Belden); and Deirdre Stokes, Manager, Corporate Treasury, Kellogg.

The winners and highly commended in each category are:

Treasury Technology Implementation Project of the Year

Winner: Omnicom Group - Global Cash Control System

The development of the Global Cash Control System (GCCS) has been a ‘game changer’ for Omnicom. The GCCS has brought the company’s cash and bank account management the best practice level of highly centralised companies. The workflow processes enabled this in a systematic and rapid manner that would have been impossible otherwise in such a large and decentralised group.

Highly commended:

• Dassault Systèmes - Going Global with SwiftNet and 3SKey.
• Honeywell - Leveraging the MyTreasury MMF Trading Platform.

 

Cash Management Project of the Year

Winner: Belden - Effectively Managing Global Liquidity and Risk

Belden successfully shifted from a regional to a global forecasting platform that is centrally controlled but regionally executed. This has improved its visibility into, and access to, each subsidiary’s excess cash. Its cash reporting accuracy rose from 80% to 99% by the end of 2010, and accuracy has been sustained at a level of 99% or better during 2011.

Highly commended:

• Brady Corporation - Treasury Transformation.
• Sun Chemical - Achieving the ‘Holy Grail’ of Cash Management.

 

Trade Finance Project of the Year

Winner: Caterpillar - Weathering the Financial Storm

Caterpillar achieved several important benefits that went beyond the original scope of the project. This initiative allowed treasury to develop closer working relationships with business units across the enterprise, placing a stronger focus on working capital and cash flow improvement. Equally important, this initiative helped suppliers finance increased production while Caterpillar met its number one cash deployment priority - to fund growth.

Highly commended:

• Nokia Siemens Networks - L/C Confirming in Vietnam.
• Petrovietnam Power - Debt Financing Arrangement.

 

Treasury Team of the Year

Winner: Brocade Transformation Programme in Financial Risk Management

Brocade Treasury team did more than implement a foreign exchange (FX) risk management programme. It initiated and implemented a transformation programme to revamp its FX-related business processes and ownership. The sheer scope and magnitude of the transformation spanned strategically to tactically - re-engineering business programmes and cross-functional processes to major technical treasury and systems improvements.

Highly commended:

• Bharti Airtel - Global Transformation.
• Nalco's Treasury Transformation.

 

Green Treasury Project of the Year

Winner: Kellogg - Going Green is GR-R-REAT!

The ‘Go Green’ efforts by Kellogg’s treasury and accounts receivable (A/R) teams have delivered tremendous results for the company. The reduction - and in some cases complete elimination - of paper has dramatically reduced the organisation’s environmental impact. Beyond protecting the environment, the company has improved processes, reduced costs and gained important efficiencies. Improved visibility and access to documentation saves time and increases productivity.

Highly commended:

• Mn Services - ESG Integration in Broker Evaluation/Selection.

 

Corporate Treasurer of the Year - Readers' Choice Award

Winner: Edward Scott, Corporate Treasurer, Caterpillar

Led by Edward Scott, Caterpillar (Cat) has embarked on a series of cash management initiatives widely considered among the most effective and innovative strategies in the market. One of the key initiatives of Scott’s efforts - a multi-year global supply chain finance (SCF) programme launched in 2010 - has been an unmitigated success in its first year and promises to yield continuous benefits going forward.

Highly commended:

• Peter van Rood, Group Treasurer, AkzoNobel.
• Susan Stalnecker, Vice President - Finance and Treasurer, DuPont.

 

Gold Award

Winner: Caterpillar - Weathering the Financial Storm

This award was given to the corporate treasury that received the highest marks across the other project categories. The judges said this about Caterpillar’s trade finance project:

• The ability to standardise payment terms with over 7,000 suppliers is nothing short of phenomenal! Add to that the positive impact on cash flow and extension of days payable outstanding (DPO) from 44 days to 59, and this project is clearly an excellent one.
• The cultural shift of focus to gain understanding of the importance of cash flow in achieving their strategic initiatives is an admirable achievement.
• As a result of these enterprise-wide efforts, Caterpillar successfully improved its working capital position while improving the cash flow and overall relationships of its suppliers - a true ‘win-win’ situation.

gtnews would like to thank its expert panel of judges, who enthusiastically worked through many best practice case studies.

First published on www.gtnews.com 

'Black' Thursday Marks the End of Sibos

23 Sept 2011 

As Sibos 2011 draws to a close, the pervading mood throughout the week was one of uncertainty - and for good reason.

Sibos seems to attract catastrophes, whether man-made or natural. In 2008, the day the SWIFT conference opened in Vienna, Lehman Brothers was no more. In Hong Kong in 2009, the opening day was subject to a typhoon level 8. However, this year it was the closing day that felt a shock: Thursday saw the biggest one-day fall and rise in stocks since the Lehman’s collapse.

The Dow closed at 10,733.83 points, but was at one stage 522 points lower, or 4.7%. The S&P 500 and Nasdaq indexes closed just over 3% down.

In the days leading up to this, ratings agency Moody’s downgraded three top US banks - Citigroup, Bank of America and Wells Fargo - citing uncertainty of sovereign support. According to the Financial Times¹(FT), global investors moved a record US$50bn in money market funds (MMFs) this week, taking money out of bonds and shares.

This uncertainty was palpable on the conference floor. Many delegates, although voicing satisfaction with the level of business they were conducting, remarked that the mood was not as buoyant as in Amsterdam last year - before the crisis in the eurozone and the US sovereign debt issues.

Many conference sessions lauded the rise of the emerging markets, but it is the developed world that drives confidence in the global markets.

Where is the Growth in 2012 and Beyond?

This question was posed at the ‘Big Issue’ debate entitled ‘Back to Business’ on Wednesday. Speaking on the panel were:

• John Coverdale, group general manager, head of global transaction banking (GTB), HSBC.
• Tim Keaney, vice chairman and chief executive officer (CEO) asset servicing, BNY Mellon.
• MD Mallya, chairman, Indian Banks' Association (IBA) and chairman and managing director, Bank of Baroda.
• Paul Simpson, head of global transaction services (GTS), Bank of America Merrill Lynch (BofA Merrill) - watch the short video interview with Simpson here.

The panel came back to the debate around the unintended consequences of regulation. Coverdale argued that although regulation is necessary, a level playing field is needed, i.e. different jurisdictions cannot implement their own flavour of the agreed global regulation. The issue of regulatory arbitrage was also discused, with both Keaney and Simpson acknowleding that with different interpretations of the same regulation arbitrage would happen, as all entities try to maximise their shareholder value.

The emerging markets remain the areas of focus in terms of growth. Moving beyond the BRICs (Brazil, Russia, India and China) to the ‘KEVITS’ (Korea, Egypt, Vietnam, Indonesia, Turkey and South Africa), all panellists could see great growth opportunities in these countries.

Simpson pointed out that outsourcing demand is coming from the public sector, both within developed and developing nations. In the developed world, governments are having to outsource what is not in their value chain because their budgets don’t go as far as they used to; while in developing nations, rapid growth requires a fast scaling up of infrastructure and products that many countries cannot manage themselves. Mallya also agreed that the public sector needs huge investments and now the private sector is taking this on in public private partnership arrangements.

But Keaney argued that there is the risk that the BRIC nations are overheating - with the exception of China - which could cause another dampening affect on global growth.

Uncertainty Rules the Day

The uncertainty in the markets is fuelling fear and, in turn, conservative behaviour. Despite being in the risk business, Coverdale argued, many banks are holding excess liquidity because of the uncertainty.

He came to straight to the point that this blog started with, stating that the industry had lost the confidence of the people as a result of the eurozone's potential disintegration and the US dollar liquidity issues. “We need to fix this crisis,” he said. “The politicians have got to stop playing around and sort it out.”

First published on www.gtnews.com 

gtnews Hosts Top Treasurers at the Global Corporate Treasury Awards

21 Sept 2011 

The gtnews Global Corporate Treasury Awards topped the evening on the second day of Sibos in Toronto.

The gtnews Global Corporate Treasury Awards gala ceremony was a main attraction for many of the corporate attendees at Sibos. Honouring all that is best in global treasury, more than 120 people joined in the celebrations at the prestigious One King West Hotel, previously the head office of the Dominion Bank for 126 years.

The evening was kicked off with cocktails, hosted by SWIFT, in the Austin Gallery, which in earlier days comprised the executive offices of the bank, before moving to the Grand Banking Hall.

The high calibre of entrants to the awards was impressive. To read all about the winners, please click here.

SEPA Panel Discussion

At the beginning of the second day of Sibos, I participated in the European Payments Council (EPC) panel discussion entitled ‘Shortcut to the Single Euro Payments Area (SEPA)’. The panel included: Gerard Hartsink, EPC chair; Kevin Brown, head of global product management, RBS GTS; Ineke Bussemaker, chair of the EPC E-commerce Payments Working Group and director, payments and savings, Rabobank Nederland; Dag-Inge Flatraaker, chair of the EPC M-channel Working Group, DnB NOR Bank; and Javier Santamaria, assistant general manager; SEPA Payment Schemes Working Group chair, EPC, Banco Santander. Over 130 people attended the session, which shows that issues surrounding the implementation of SEPA still persist.

The panel discussed:

• Meeting customer needs: an update on the evolution of the SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) payment schemes and other EPC deliverables.
• The expected EU SEPA regulation: deadlines for mandatory migration to SEPA and other aspects relevant to the market.
• The global perspective: impact of SEPA beyond Europe.

I presented results from the gtnews 2010 Payments Survey, which showed that corporate treasurers still have many questions about SEPA and what it will mean for their business and operations. The main findings of the 2010 survey were:

• Seventy percent of organisations have not implemented SEPA products - in western Europe this was still quite a high percentage at 60%.
• Of the respondents who do not currently invest in SEPA products, 46% do not plan to invest in SEPA products in the future.
• The most popular reason given by 66% of organisations for not investing is that SEPA is that it is not applicable to their company.
• Nineteen percent of responding organisations indicate they were “not convinced of the opportunities and benefits for me/my company”.
• Another 19% indicated that they “need more insight on the impact of implementing SEPA in my company” as a reason for not investing in SEPA products.
• Surprisingly 67% of organisations in western Europe cite “not applicable to my company” as a reason for not investing in SEPA products, followed by “not convinced of the opportunities and benefits for me/my company” with 33% of respondents.

In an attempt to update the picture, particularly after the developments outlined by the other panellists, I took a straw poll of the European Treasurers Council in September - this resulted in more positive trends, yet the main issue surrounding the end dates for legacy payment instruments remained top of mind for corporates.
In the straw poll, 71% believe that SEPA regulations will affect their business, yet there is still much uncertainty around what that really means - and almost three in 10 corporates think that their business won’t be affected.

Better communication is needed and the responsibility for that is laid at the feet of the banks. In the straw poll, only 63% said that their bank had talked to them about migrating to SCTs and SDDs, so there is a gap there to be filled by the banks.

The main conclusion to be drawn from a corporate perspective is that there may not be a shortcut to SEPA. A Finnish bank respresentative in the audience confirmed that hypothesis, as Finland has set a strict deadline of next month to switch over the SEPA instruments. She advised that banks need to sit down with their corporate customers and go through the change on a face-to-face basis.

Basel III and Trade Finance

The thorny issue of how Basel III will affect trade finance was addressed by Howard Bascom, board member and past chairman of the board, BAFT-IFSA; Steven Beck, head of trade finance, Asian Development Bank (ADB); Adnan Ghani, head of global transaction services (GTS) Trade, RBS; and Kah Chye Tan, global trade finance and working capital, Barclays Corporate. The session was moderated by Rebecca Spong, editor, Global Trade Review.

All four panellists agreed that, as it stands, Basel III will increase the price of trade finance products - a cost that will be passed down to the corporate client. It was this type of ‘unintended consequence’ that was the main subject of the session.

Ghani argued that the “devil was in the detail”, in the sense that although the purpose of the regulations were to protect and strengthen the global financial system, while in actual fact the rules as they stand would “drive banks to put money in more riskier portfolios” because they do not distinguish between low risk/low margin products, such as trade finance, and high risk/high margin products.

Tan argued that there is now a good dialogue between the banking industry and the EU/Basel Committee to address the outstanding issues. Although the pace is a bit slow in terms of his expectations, he is confident that the industry will end up at the right place. He added that any bank that “gets” the Basel rules will have a competitive advantage.

Ghani made a plea from the banking side that corporates and small and medium-sized enterprises (SMEs) had to speak up and join this discussion. It is the SMEs that attract the most attention from regulatory bodies to ensure they are not detrimentally affected.

First published on www.gtnews.com 

Financial Infrastructure: Bigger, Better and ... More Regulated

20 Sept 2011 

The threat - and also opportunities - of new regulations dominated the opening plenary at Sibos 2011. Not surprisingly, there were a swathe of opinions as to the best way forward, but most agree that standardisation and harmonisation is the task of the financial services industry.

The opening plenary of Sibos 2011 focused on the rising emerging market economies as a backdrop to the crises in the eurozone and US. Keynote speaker John Havens, president and chief operating officer (COO) of Citigroup, outlined his view of the major trends in global economics:

• Decoupling between emerging markets and developed markets.
• New wave of regulations: national and international.
• Changes in technology revolutionising consumer expectations.

Havens identified four consequences of these trends:

1. A shift in global transaction banking from trans-Atlantic to Asia.
2. The unintended consequences of regulations.
3. A shift in financial services economies, with effectively a new shadow banking system.
4. Recalibration of banking economics.

His prediction was that banks would adopt a universal banking model, one that he believed Citi was at the forefront of engineering.

Tim Lane, deputy governor of the Bank of Canada, spent most of his keynote speech addressing the issue of systemic risk in the global financial infrastructure. He stressed the importance of building a robust financial system, including payments and settlements, trading and collateral management.

He explained how Canada was evaluating whether or not to set up a Canadian central counterparty (CCP) for clearing and settlement, specifically the advantages of doing so such as making it more straightforward for authorities overseeing systemically important banks; better management prices; liquidity support provision, and to reduce the financial shocks from abroad. However, he also raised some concerns such as to whether it would be economically viable and, related to that, would it deliver what Canadian and global payers were looking for?

Again, similar to Havens, Lane showed some concern over the unintended consequences of new regulations, although he did stress that the Bank of Canada supported the G20 reforms, and saw them as crucial for the stability of the global system. Havens accentuated that the world needed an open, global, standardised financial ecosystem - something that was bigger and better than what is on offer today in order to resist the shocks.

Yawar Shah, chairman of the board, SWIFT, opened the plenary citing the statistics of Sibos 2011: the last time Sibos was in Canada 24 years ago, it attracted 1700 people. Today here are close to 7,000, representing over 170 countries. He was quick to point out that last year in Amsterdam, Sibos experienced a wave of optimism in terms of the global outlook, whereas this year uncertainty reigned the day.

Interestingly, Shah also stressed the importance of the emerging economies and said there was a paradigm shift in how banks and world economy carries itself today. He stated how important it was to “serve tomorrow’s customer base”, which may be why the next three Sibos’ are being held outside of Europe, SWIFT’s main user base: next year will be in Osaka, Japan, while 2013 will be held in Dubai and 2014 will be in Boston. This is a bold gamble by SWIFT to increase its numbers outside of its strong base.

Today, I will be participating in a panel ‘Shortcut to SEPA - The European Payments Council (EPC) Highlights Latest Developments in the Single Euro Payments Area’. Plus I will be conducting two more video interviews with Pierre Fersztand, global head of cash management, BNP Paribas, and Richard Dallas, transactional banking director, Lloyds Bank Corporate Markets.

Don’t forget that tonight we will be announcing the winners of the gtnews Global Corporate Treasury Awards.

First published on www.gtnews.com 

Sibos 2011: Opening Day in Toronto

 19 Sept 2011

Sibos 2011 is set to kick off today in Toronto, Canada. This year SWIFT's user conference has attracted more than 7,000 delegates, including 200 exhibitors and speakers. It has come a long way from its first conference of 800 attendees in 1980 in Copenhagen.

This year the Sibos conference programme is built around four main topics:

1. Regulation re-visited.
2. Technology.
3. Changing landscape, new expectations.
4. Global and local perspectives.

Despite the sigh of relief in Amsterdam last year, the global economic woes have not yet been resolved. The crisis of confidence in the eurozone, and also the US, are a worry for many participants in Toronto, even though the ‘Big Issue’ debates that dominate the main plenaries seem to indicate that the crisis is well and truly over with titles such as ‘The Post-crisis Financial Transaction Infrastructure’ and ‘Back to Business: Where’s the Growth in 2012 and Beyond?’ The discussions on the conference floor may be slightly more cautious in outlook.

Corporate Forum 2011

For the fourth year running, the conference offers a stream dedicated to corporates. This year the stream is entitled ‘Collaborating for Success - Advancing Critical Dialogue Between Corporates and Banks’ and aims to deliver insight into emerging areas that affect companies and how they manage their money in an increasingly changing world. The main sessions will covers topics such as electronic invoicing (e-invoicing), SWIFT for Corporates, Basel III and its impact on trade finance, mitigating risk of and financing open account transactions, payment hubs, SEPA challenges and the role of collaboration in corporate banking.
Although the numbers are down on last year, there are many excellent speakers from the corporate world including:

• Anita Prasad, general manager, treasury capital management, Microsoft - view the gtnews video interview with Prasad from Sibos 2010 in Amsterdam.
• John Colleemallay, director, group treasury and financing, Dassault Systèmes.
• Sang Hee Pang, general manager, export information team, global business division, Hyundai.
• Debra Hinds, global cash management, director, Bombardier.
• Brooke Tilton, director, treasury operations, Viacom.
• Raul Rivas, manager, finance operations and projects NAFTA, Daimler North America.

 

gtnews at Sibos

gtnews and sister publication bobsguide have a stand this year - PS06 - so if you are at the conference, please drop by to say hello.

Otherwise, you can follow our activity through my daily blog and also a guest blog from financial supply chain (FSC) contributing editor, Enrico Camerinelli. Also, we will be conducting in-depth video interviews with industry experts to give you an inside track as to what are the big debates at the conference. Interviewees include:

• Alice Eastman, senior vice president of cash management and payment services, Scotiabank.
• Paul Simpson, head of global treasury solutions, Bank of America Merrill Lynch (BofA Merrill).
• Nanda Kumar, president and chief executive officer (CEO), SunTec.
• Werner Steinmueller, managing director, head of global transaction banking (GTB), Deutsche Bank.
• Pierre Fersztand, global head of cash management, BNP Paribas.
• Richard Dallas, transactional banking director, Lloyds Bank Corporate Markets.
• Gerard Hartsink, European Payments Council (EPC) chair.
• John Laurens, head of global payments and cash management, Asia-Pacific, HSBC - view the gtnews video with Laurens from Sibos 2009 in Hong Kong.
• Simon Newstead, head of financial institution (FI) market and business strategy, global transaction services (GTS), RBS - view the gtnews video with Newstead from Sibos 2010 in Amsterdam.
• Donna Alexander, BAFT-IFSA CEO.
• Ashutosh Kumar, global head of cash and trade products, Standard Chartered Bank.

We will also be tweeting from the event - please follow our Twitter feed.

Today the gtnews and bobsguide teams took advantage of our surroundings and went to a Blue Jays and New York Yankees game at Rogers Centre - Blue Jays won 3-0. Hail the sole standing Canadian major league baseball team.

Tieto have set the tone of the evenings to come with a soiree this evening up the CN Tower. The food was amazing, and the view even more so.

First published on www.gtnews.com 

2011 Global Corporate Treasury Awards - Shortlist

23 Aug 2011 

At a time when treasury departments are doing much more with a lot less, best practice in treasury needs to be highlighted and celebrated. The gtnews Global Corporate Treasury Awards, now in their second year, are dedicated to recognising and rewarding the very best in corporate treasury, celebrating the great and the good of the industry.

The gtnews 2011 Global Corporate Treasury Awards, sponsored by Bank of America Merrill Lynch, pays tribute to treasury innovation that has been fundamental to the success of a corporate's business.

The awards present an outstanding cross-section of all that's best in treasury. The winners are chosen by an independent jury of highly influential corporate treasurers and are totally independent; the winners remain unknown until the results are announced at an exclusive awards ceremony on Tuesday 20 September in Toronto, in conjunction with the Sibos Corporate Forum.

More than 60 corporate treasury departments from across the world entered the awards which include two new categories this year - Trade Finance and Green Treasury.

Carole Berndt, head of global treasury solutions, Europe, Middle East and Africa (EMEA), says: “Bank of America Merrill Lynch is proud to once again sponsor the gtnews Global Corporate Treasury Awards, as it acknowledges those who strive to bring excellence to the treasury sector. After the phenomenal success of last year’s inaugural awards, we are delighted to be associated with the event in its second year.

“The economic downturn has led the focus of the financial community to centre on cash management and treasury solutions, as those who work within the industry strive to bring innovation and security during this time of market uncertainty. The gtnews Global Corporate Treasury Awards helps to recognise those teams who are at the forefront of this work," she adds.

Awards Shortlist

Treasury Technology Implementation Project of the Year

• Dassault Systemes: going global with SwiftNet and 3Skey
• Honeywell: leveraging the MyTreasury MMF trading platform
• Omnicom Group: global cash control system

Cash Management Project of the Year

• Belden: effectively managing global liquidity and risk
• Brady Corporation: treasury transformation
• Sun Chemical: achieving the 'Holy Grail' of cash management

Trade Finance Project of the Year

• Caterpillar: weathering the financial storm
• Nokia Siemens Networks: LC confirming in Vietnam
• Petrovietnam Power: debt financing arrangement

Treasury Team of the Year

• Bharti Airtel: global transformation
• Brocade transformation programme in financial risk management
• Nalco's treasury transformation

Green Treasury Project of the Year

• Kellogg: going green is GR-R-REAT!
• Mn Services: ESG integration in broker evaluation/selection

Corporate Treasurer of the Year - Readers' Choice Award

• Edward Scott, Corporate Treasurer, Caterpillar
• Peter van Rood, Group Treasurer, AkzoNobel
• Susan Stalnecker, Vice President - Finance and Treasurer, DuPont

Treasury Technology Implementation Project of the Year

This category covers any aspect of treasury technology. The award will be given to the corporate treasury that developed and implemented an innovative IT project which solved a specific problem or established best practice within the organisation.

Dassault Systemes: going global with SwiftNet and 3Skey

Between summer 2010 and February 2011, Dassault Systemes managed a global project divided in three parts: ISO 20022 XML formats implementation (ETEBAC5 protocol); SWIFTNet implementation with all Dassault Systèmes’ bank partners; and 3SKey go-live for all payment files in SWIFTNet. The rationalisation of banks partners and, above all, the deployment of SWIFTNet allowed a smooth and rapid integration of new entities and countries, and prepared the group for major acquisitions. One judge commented: “The combination of rationalising treasury activities and introducing a tool to manage the new environment requires good project management. Having 95% of your money pooled in such a short period is a huge success.”

Honeywell: leveraging the MyTreasury MMF trading platform

Honeywell in-house bank changed its status to a financial company and was therefore allowed to use money market funds (MMFs) as an investment instrument. Given the instability in the financial markets, it needed to identify objective criteria to ensure that the funds selected complied with the treasury objectives of safety, liquidity and yield. The full market transparency provided by the trading platform helped Honeywell negotiate significantly improved terms with its fund providers. “Economic gains of US$800,000 per year and 50% re-assignment of staff illustrate the benefits of this project,” remarked a judge. “The project was rolled out iteratively, providing the opportunity to identify benefits before introducing new regions/countries.”

Omnicom Group: global cash control system

Omnicom Group maintains a decentralised structure that grants its agencies great flexibility and autonomy in its operations. However, this creates cash management, risk management and banking challenges that aren’t faced by more centralised companies. The corporate treasury wanted to fully optimise its allocation of liquidity and gain full control of all bank accounts open across the group. Similarly, it wanted to fully quantify and manage risk from local banks that were beyond its visibility. The corporate treasury demonstrated a deep level of planning, as well as consistent vigilance with regards to progress throughout the whole project, according to one judge. “All in all, a great success for treasury and for the company.”

Cash Management Project of the Year

The winner of this award will be the treasury that was best able to improve its cash management processes, whether in accounts payable, accounts receivable, cash forecasting, netting/pooling, etc.

Belden: effectively managing global liquidity and risk

“Many corporates could learn from this project,” said one judge. As Belden, one of the largest US-based manufacturers of high-speed electronic cables, was expanding globally and the need to manage cash flows consistently and effectively across the enterprise intensified. The company wanted to convert many regional processes to one global process, which would both enhance the accuracy of its forecasting and synchronise the timing of forecast results on a global basis. “Great improvement in the cash forecasting process - an area where many companies still struggle,” said the judge.

Brady Corporation: treasury transformation

Brady tripled in size through 30 acquisitions during a period of rapid global expansion. Although its growth strategy was successful, Brady saw its complexity and finance costs increasing. Financial transformation was required to position the organisation for profitable future growth. Brady developed an aggressive plan that used communication, training, senior sponsorship to overcome objections, as well as using partner expertise push a rapid conversion schedule forward. One judge commented: “Technological transformation and cultural change were well tackled. The treasury illustrated a good approach by using training in the region and at the shared service centres (SSCs) to establish relationships and confidence in the SSC staff. Active support from the CFO and CEO was also crucial.”

Sun Chemical: achieving the 'Holy Grail' of cash management

Sun Chemical, the world's largest producer of printing inks and pigments, embarked on a project to implement a single application of SAP across the entire company globally, while at the same time consolidating banking relationships to a single banking partner, and transitioning to a shared service centre (SSC) environment. Sun Chemical recognised an opportunity to move from regional SSCs to a global SSC environment, providing treasury with vastly improved visibility and control. As one judge said: “Given how difficult it can be for companies to fully implement SAP throughout their organisations, the fact that this treasury reduced 150 systems in 23 countries to one centralised system globally in five years is exceptional. All key metrics indicate that all the objectives were met.”

Trade Finance Project of the Year

This award will be given to the corporate treasury that has developed an innovative trade finance project and can exhibit best practice in its relationships with its bank and business partners.

Caterpillar: weathering the financial storm

In 2010, as global economic conditions improved, Caterpillar shifted its ‘Stay Strong’ initiative from responding to the economic crisis to a more proactive focus on capital-efficient profitable growth and the development of a cash flow culture, including a project to standardise supplier payment terms enabled by a global supply chain finance (SCF) programme. It generated in excess of US$1bn cash flow from standardising payment terms, with over 7,000 suppliers enabled by the SCF programme. “Treasury developed closer working relationships with business units across the enterprise, placing a stronger focus on working capital and cash flow improvement,” said one judge. “This entry exhibits very impressive results, and the programme is especially beneficial for the participating suppliers.”

Nokia Siemens Networks: LC confirming in Vietnam

Based in Vietnam, Nokia Siemens Networks (NSN) requires any letters of credit (LCs) issued by local banks in Vietnam to be confirmed by an international bank in Singapore. NSN wanted to implement a solution to meet its requirement to ship under confirmed LCs to mitigate counterparty and sovereign risk. The solution also needed to meet the importer’s need for payments to be linked to delivery and performance milestones and build in a usance tenor for part of the payment, instead of sight payment terms. One judge said: “Partnering with key financial institutions was a critical element of their success. They have set a precedent for attaining new objectives.”

Petrovietnam Power: debt financing arrangement

Responsible for all oil and gas resources in Vietnam, PetroVietnam’s goal was to find affordable, long-term financing for its Nhon Trach 2 power plant, a project considered key to the company as well as to national planning objectives. It wanted to maximise the proportion of export credit agency (ECA)-supported financing in its total borrowings and thereby reduce the proportion of commercial bank debt. The support from the ECAs meant lower loan pricing and longer tenors, in line with the company’s objectives. “The project succeeded in getting the needed support from the ECAs to lower loan pricing and get longer tenors. Financing was successfully syndicated prior to closing, and international banks were engaged with long-term interest in Vietnam,” commented a judge.

Treasury Team of the Year

This award is for the corporate treasury team that can best demonstrate vision and innovation in terms of transforming their treasury department to meet future challenges. The winner will show excellence and resourcefulness across all treasury disciplines.

Bharti Airtel: global transformation

“Thoroughly planned and executed. The resource allocation and approach were well defined. It is best-in-class,” said one judge about this team. Bharti Airtel, an India-based telecom company, entered into a global transformation phase with the landmark acquisition of Zain’s operations in 16 countries. Given the scale and complexity, a ‘quickest’ transformation and integration of the treasury function became critical. The objectives were four-fold: setting up a global treasury organisation; defining the treasury architecture; effective measurement, monitoring and management of debt, liquidity and risk; and laying the technology platform and solutions for seamless flow of information.

Brocade transformation programme in financial risk management

Brocade treasury team transformed the company’s foreign exchange (FX) risk management by: taking a leadership role in re-engineering the FX-related business processes; gaining respect from other functions; developing and implementing programmes to support the sales organisation in growing international business; re-engineering its hedging programmes by improving the accuracy of exposure identification and reporting; and re-designing its systems strategy. “I am impressed by the fact the treasury is now considered a key partner in major business decisions. This is still not often the case, but here it has been achieved,” stated a judge.

Nalco's treasury transformation

Nalco Company is a leading water treatment and process improvement company. Nalco’s European treasury team embarked on a variety of initiatives to position the company as best-in-class in operations and financial performance. The company has implemented a host-to-host solution and uses a single version of SAP and iDoc file for all of its payments. Standardisation and consistency have allowed the business to process all payments from Europe, Asia and the Americas through its global shared service centre (SSC) in Buenos Aires. “The treasury team clearly identified the elements required for success,” according to one judge. “They demonstrated the importance of collaboration with external service providers in designing the solutions.”

Green Treasury Project of the Year

This award will be given to the corporate treasury that has been most successful in implementing a project around sustainable business models, greening the treasury or supply chain, environmental awareness, social responsibility or a combination of the above.

Kellogg: going green is GR-R-REAT!

Kellogg Company began a ‘Go Green’ initiative in 2005, to further reduce the company’s environmental impact. The treasury and accounts receivables (A/R) teams joined forces to meet the following three objectives: eliminate many common manual processes; improve the timeliness of the bank account reconciliation process; and reduce the use of paper, which in turn impacts energy use and waste generation. The total cost savings to date is approximately US$500,000. The reduction, and in some cases complete elimination, of paper has dramatically reduced the organisation’s environmental impact. “Cost savings in all receivables areas illustrating a 39% reduction in bank fees is an impressive statistic (and annual savings). Nice ROI [return on investment],” said one judge.

Mn Services: ESG integration in broker evaluation/selection

Mn Services, a Dutch-based asset manager, is convinced that environmental, social and governance (ESG) factors improve the risk/return trade-off in the long term. Therefore, it integrates ESG factors in all investment decisions of all asset classes. Moreover, Mn Services screens all third parties on their corporate social responsibility. Since the beginning of this year, Mn Services has taken an industry unique step to integrate ESG factors in the broker selection. One judge commented: “ESG factors were built into a quantifiable analysis solution. Furthermore, Mn Services uses these scores to help determine with which brokers they will do business and how much business.”

Corporate Treasurer of the Year, Readers' Choice

The winner of this award will be recognised by their peers as an industry spokesperson and leader - a treasurer who has overcome the challenges posed by the financial crisis and made an outstanding contribution in treasury.

Edward Scott, Corporate Treasurer, Caterpillar

Led by Edward Scott, Caterpillar has embarked on a series of cash management initiatives widely considered among the most effective and innovative strategies in the market. One of the key initiatives of Scott’s efforts - a multi-year global supply chain finance (SCF) programme launched in 2010 - has been an unmitigated success in its first year and promises to yield continuous benefits going forward. Heralded as a ‘win-win-win’, the SCF solution has enabled Caterpillar to achieve major working capital objectives.

Peter van Rood, Group Treasurer, AkzoNobel

Peter van Rood and the treasury team achieved a complete transformation of AkzoNobel's treasury function despite some of the most extreme circumstances imaginable, including the £8bn acquisition of ICI, the need to refinance 60% (€2bn+) of the company's external debt and having to radically cut costs, while simultaneously rebuilding a fragmented treasury with limited grasp of contemporary processes, resulting in a 31% reduction and 70% churn of staff.

Susan Stalnecker, Vice President - Finance and Treasurer, DuPont

Susan Stalnecker stands out for her leadership of the company’s treasury and merger and acquisition (M&A) teams, particularly her pivotal role in the acquisition of Danisco, a global enzyme and specialty food ingredients company. Stalnecker has forged strong external and internal partnerships in 35 years at DuPont. This served her team well in effectively navigating issues from tax, treasury, legal, audit, risk, procurement, executive management, financial institutions, ratings agencies, regulators, and key business leaders to complete the transaction.

Gold Award (Overall Winner)

This award recognises excellence in treasury management and honours the corporate treasury operating as a strategic partner to the business. The Gold Award winner will show a standard of best practices throughout a company's treasury or on the ground-breaking nature of a particular project. The overall top score from among all the entries will win this award.

Berndt concludes: “Bank of America Merrill Lynch would like to congratulate all of the shortlisted treasury teams and we look forward to the awards ceremony itself on 20 September 2011 in Toronto, when the winners will be announced.”

First published on www.gtnews.com 

Last Steps for SEPA?

17 June 2011
Many speakers hailed the end of the single euro payments area (SEPA) at the sixth EBAday, as the promise of end dates are dangled enticingly in sight. However, there are still many issues to overcome before the industry can truly put the project to bed.
 
In the final session at the sixth annual EBAday, panellists from across the European transaction banking industry argued that the end was in sight for the single euro payments area (SEPA) project. Björn Flismark, senior vice president, SEB, led the charge by saying that the industry is now taking the ‘last steps’ in SEPA migration.

Kirstine Nilsson, SEPA and Payment Services Directive (PSD) co-ordinator at Swedbank, agreed, adding that the industry could see the light at the end of the tunnel, referring to the greater surety of end date legislation for legacy payment instruments. “We have done the boring stuff in order to pave the way [for SEPA], and now it is time to harvest the fruit,” she said.

In the opening session, Soledad Núñez, general director of the treasury and financial policy, Treasury of Spain, set the tone of the Marid conference and focused her speech on Spain’s adherence to the raft of financial regulations being rolled out by Brussels, with an emphasis on SEPA, effectively steering clear of any discussion of Spain’s economic woes. Núñez said that currently 23% of payments were now SEPA-compliant, from a 1% start in 2008. She proudly stated that the central government was setting a good example to other public payers by making 100% of its payments as SEPA Credit Transfers (SCTs).

Yet after nine long years of discussion and debate, it is quite difficult to believe that the end is nigh. In Flismark’s earlier session, entitled ‘Towards a SEPA Migration End Date’, the panel was less sure.
Michael Thom, retail issues, consumer policy and payment systems, European Commission (EC), said that the end date “is coming”. The permanent representatives of EU Member States have approved the text of the EC’s draft migration regulation - which promotes two end dates of February 2013 for SCTs and February 2014 for SEPA Direct Debits (SDDs) - and the draft has now moved to the European Parliament for negotiation. Thom believes that an agreement should be reached by the autumn.

However, the European Parliament is angling for one end date. Simon Newstead, head of financial institution (FI) market and business strategy, global transaction services, RBS, also agreed that one end date was better than two. Although Newstead believed that SEPA is now close to “crystallising”, he listed a number of items on his wishlist, including:

• Removing the ambiguity for corporate clients as to whether they will be obliged to use XML standards.
• A fuller recognition of the difference between corporates and consumers, in terms of corporate opt-out schemes.
• Improved corporate/consumer direct debit checking measures.
• A complete audit, country by country, of domestic niche payment products that will survive after the end date(s).

Some believe that the industry is so keen on putting SEPA behind it that the debate has already moved on. Sean Fitzgerald, chief executive officer (CEO) and managing director, Sentenial, said: “The conversation has moved on before we have solved the last problem. There is still a lot of work to do before SEPA is over and done with.”

In terms of new issues that the banking industry has to deal with, Basel III struck a chord with participants and discussions continually returned to this topic. In the opening roundtable, ‘The New Era of Transaction Banking: Strategies for Growth’, Alexander Caviezel, managing director, treasury and securities services, Europe, Middle East and Africa (EMEA) executive, JP Morgan, expressed concern over the unintended consequences of new regulations, particularly Basel III.

In the session entitled ‘Financial Supply Chain - Convergence of Trade Finance and Payments for Corporates?’, Martin Thomas, managing director, treasury services, also at JP Morgan, warned that Basel III, as it currently stands, will drive trade finance out of business, because of collateral requirement for working capital deposits. In this context, supply chain finance, or business-to-business (B2B) finance as it is termed by Enrico Camerinelli, senior analyst for corporate banking at Aite Group, will come into greater focus in the coming period.

The sixth annual EBAday attracted 650 participants and 37 exhibitors. In 2012, EBAday will be held in Edinburgh.

First published on www.gtnews.com