Beheer van wisselrisico’s | Indekken of niet?

| 31-3-2021 | François de Witte | treasuryXL |

Internationaal zaken doen is onvermijdelijk verbonden met financiële risico’s. Hoe kunt u wisselkoersrisico’s op een verantwoorde wijze beheren?

Omschrijving

Weet u hoe verantwoord moet omgaan met wisselkoersrisico’s? Het antwoord geenszins éénduidig … Maar wat zeker is, is dat goede beslissingen beginnen bij een concrete inschatting van dit risico.

Assessment van uw wisselkoersrisico’s

Het is belangrijk om uw risico’s te identificeren en te kwantificeren. Koopt of verkoopt u in vreemde munten? Welke klantenrisico’s hebt u? Hebt u investeringen of leningen in vreemde valutas? En wat met andere cash flow risico’s? U moet beslissen in welke mate deze risico’s kunnen worden vermeden en of ze aanvaardbaar zijn.

Actieplan

Dan blijft de belangrijke vraag natuurlijk welke acties u neemt nadat uw situatie in kaart is gebracht. Worden de risico’s getransfereerd naar derden? Worden de risico’s ingedekt door verzekeringen of andere wisselkoersinstrumenten. Om de juiste verantwoorde beslissingen te nemen, moet u beschikken over het inzicht in deze verzekerings- en indekkingstechnieken. Hoe organiseert u een performante controle, opvolging en rapportering van de risico’s?

Voor wie is deze opleiding bestemd?

Deze module richt zich tot bedrijfsleiders, alsook alle financieel verantwoordelijken, treasurers, leden van het treasury team, controllers, financieel adviseurs, accountants, relatiegelastigden ondernemingen bij financiële instellingen.

Voorkennis

Financieel basisinzicht en ervaring met financiële transacties is vereist. Voelt u zich hier nog onvoldoende mee vertrouwd dan kan u voorafgaand de opleidingsmodule ‘Cash- en werkkapitaalbeheer’ volgen.

Bijkomende info

Dit programma komt in aanmerking voor 6 uur permanente vorming ITAA.

Programma

1. Financieel risico management: algemeen

  1. Definitie
  2. Identificatie, kwalificatie en kwantificatie van de risico’s
  3. Risico tijdslijn
  4. Verzekerings- en indekkingstechnieken: instrumenten
  5. Risico politiek: strategie en tactiek
  6. Risicomanagement: procedures, opvolging, controle en rapportering

2. Wisselkoersrisico’s

  1. De financiële markten – algemeen
  2. Type exposures: transactie, boekhoudkundig en economisch
  3. Natuurlijke indekkingen
  4. Interbancaire markt versus futures
  5. Instrumenten voor de indekking van de wisselrisico’s
  • FX: Spot (contante) indekking
  • Forward (termijn) indekking
  • Currency swaps
  • Valuta-futures
  • Valuta-opties
  1. Contractuele aspecten – ISDA documentatie
  2. Bancaire aspecten: risicoweging
  3. Regulering
  4. Boekhoudkundige aspecten
  5. Aanbevelingen
  6. Case study in groep

Lesdata

Datum Startuur Einduur
maandag 19/04/2021 09:00 12:00
maandag 26/04/2021 09:00 12:00
Data onder voorbehoud van eventuele wijzigingen

Meer informatie en inschrijven: Klik Hier

 

Francois de Witte

 

François de Witte

 

 

 

 

 

 

3-daagse opleiding Cash- en werkkapitaalbeheer | Start midden maart 2021

| 16-2-2021 | François de Witte | treasuryXL |

Een transparant werkkapitaalbeheer met een goed inzicht in cash-, treasury- en creditmanagement

Omschrijving

Productieprocessen, (internationale) logistieke processen en verkoopprocessen brengen grote geldstromen in beweging. Een bedrijf financieel gezond houden kan niet zonder een gedegen werkkapitaalbeheer. In deze basisopleiding bekijken we alle inkomende en uitgaande geldstromen (debiteuren, crediteuren, voorraden en cash). U leert hoe u deze geldstromen kunt beheren en optimaliseren. Een aanrader voor iedereen wie interesse heeft en de noodzaak inziet van een transparant treasury- en creditmanagement.

Voor wie is deze opleiding bestemd?

Deze module richt zich tot bedrijfsleiders, alsook alle financieel verantwoordelijken, leden van het treasury team, controllers, financieel adviseurs, accountants, accountmanagers en productmanagers bij financiële instellingen.

Voorkennis

Financieel basisinzicht is vereist.

Bijkomende info

Het programma komt in aanmerking voor 9 uren permanente vorming bij ITAA.

Methodologie

Het programma is doorspekt met cases die samen met de deelnemers behandeld worden. Naast voorbeelden uit de praktijk die de theoretische onderbouw concretiseren, is er steeds aandacht voor de opmerkingen en vragen van de deelnemers. Om deze reden is het aantal deelnemers beperkt.

Programma

1) Basis Cash & Treasury

  • Factoren die de cash behoefte beïnvloeden (DSO, DPO, DIO, Bedrijfskapitaal)
  • Cash forecasting-technieken & logica (korte + lange termijn)
  • Bank connectiviteit
  • Betalingen
  • Hoe cash vrijmaken?
  • Cash management tools
  • Financieringstechnieken
  • Risk management (wisselkoersrisico)

2) Basis Creditmanagement

  • Effecten van credit management op het werkkapitaal
  • Bouwstenen van prospect naar klant
  • Basisprocessen, best practices en opvolging ter optimalisatie van uw werkkapitaal

Lesdata

Datum Startuur Einduur
woensdag 17/03/2021 09:00 12:00
woensdag 24/03/2021 09:00 12:00
woensdag 31/03/2021 09:00 12:00
Kies eventueel een andere locatie of tijdstip

Data onder voorbehoud van eventuele wijzigingen.

Meer informatie en inschrijven: Klik Hier

 

Francois de Witte

 

François de Witte

 

 

 

 

 

 

Treasury Management during the COVID 19-crisis: Opportunities & Risks – Live Webinar

| 1-2-2021 | François de Witte | treasuryXL |

As a result of the COVID19, many companies are faced with cash & liquidity problems. How do you deal with this? What tools do you have available to manage this? How do you approach the stakeholders, including the banks for additional loans. Find out in upcoming event with the help of our Expert François de Witte. Continues in Dutch…

Deze opleiding heeft als doelstelling om inzicht te geven in:

  • de tools voor het cash & liquidity management en hoe ze te gebruiken;
  • hoe je bijkomende financiële ademruimte creëert: beheer van werkkapitaal – uitstel van kosten;
  • hoe je de banken benadert voor uitstel van aflossingen en/of bijkomende kredieten;
  • de inschatting van de risico’s en opportuniteiten van deze nieuwe situatie;
  • het opstellen van een concreet actieplan.

Doelgroep

De opleiding kan gevolgd worden door verschillende doelgroepen:

  • KMO relatiegelastigden van banken;
  • Financiëel verantwoordelijken van KMO’s en non profit organisaties;
  • Corporate Treasurers.

Vereiste voorkennis

Advanced level: biedt praktijkgerichte toepassingen op de reeds verworven theoretische kennis van de “basic level” opleidingen (uitdieping).

Programma

Inleiding: Belang van cash & liquidity management

Deel 1: Tools voor het beheer van cash & liquidity management van je onderneming:

  • Wat is mijn cash positie vandaag?
  • Cash forecast voor de komende dagen, of zelfs weken?
  • Beheer van werkkapitaal
  • Cash Burn Rate – Cash runway
  • Dagelijkse stuurgroep Cash Positie
  • Beheer van financiële risico’s

Deel 2: Tips voor het verbeteren van je cash positie:  

  • Beheer van de klantenpost
  • Beheer van de voorraden
  • Beheer van je leveranciers
  • Uitstel van bepaalde uitgaven

Deel 3: Onderhandeling van uitstel vervaldagen of nieuwe kredieten bij de banken:

  • Kredietbeoordeling door banken: aandachtspunten
  • Wat is momenteel voorzien door de overheid, Febelfin en de bank community?
  • Hoe benadert je best de banken: tips en tricks voor je kredietdossier 

Deel 4: Risico’s en opportuniteiten – Actieplan:

  • Risico’s en opportuniteiten
  • Tips & Tricks
  • Actieplan 

Q & A – Coaching

Praktische Informatie

  • Datum: 01-03-2021
  • Tijd: 10u – 12u30
  • Duurtijd: 2u30 (met pauze tussenin)
  • Plaats: inloggen op online platform
  • Extra info: Via het online leerplatform kan u doorklikken naar de webinar. U vindt alle informatie onder de categorie ‘mijn planning’.

Verder hoeft u niets te downloaden. Om de webinar te kunnen volgen, heeft u nodig: een computer, een internetverbinding en de mogelijkheid om geluid af te spelen. U krijgt via uw scherm de lesgever en de presentatie te zien. U heeft ook de mogelijkheid om gedurende de hele webinar vragen te stellen.

Methodologie

Type opleiding: Webinar (korte online opleiding)

Opleidingsmateriaal:

  • PowerPoint presentatie

Totale Prijs

Leden: € 160
Niet-leden: € 180
Partner BZB: € 160
Incompany: op maat, prijzen op aanvraag

REGISTER TODAY

Francois de Witte

 

François de Witte

 

 

 

 

 

 

Update Digital Finance Summit 2020

| 02-12-2020 | François de Witte | treasuryXL |

After having worked for more than 30 years in banking, François launched his own consultancy activity, FDW Consult, specialized in finance and treasury consulting. From 2014 to 2016, he was also Solution Partner Treasury & Finance at USG Professionals. Since then he took up several assignments, including one in the automotive sector with Ginion Group and with Ibanity, part of Isabel Group in the area of PSD2 and open banking. He currently is Senior Project Manager Treasury at Gaming1 (part of Ardent-Group). 

Introduction

For the 5th year, Fintech Belgium organized its annual seminar, the Digital Finance Summit, this year with as main theme “The World After”.
Due to the current sanitary situation, this year’s edition went entirely ONLINE! It was attended by over 400 persons. There were also over 230 virtual stands of exhibitors; The organization was seamless. I perceived a participant experience which was not that far away from a physical gathering.

 Some messages

 Main Stage Sessions

During the general sessions, the main message was Digital becoming the new normal. Xavier Corman, Board Member of Fintech Belgium stated: “The Covid Crisis has also brought good thing. Years worth of Digital transformation.”.

Despite the virtual exchanges, which following on the COVID19 crisis, increased dramatically, in a digital worlds, People and trust become more important. We got also interesting testimonies of banks moving to disruptive models, such as Aion (e-bank providing full set of services for a fixed subscription fee and KBC (using AI models to improve its services in the insurance).

There is a large need for digital identity, like e.g. ITSME in Belgium, but more importantly of the interoperability of the digital identity solutions. Prof Bruno Colmant • highlighted that the creation of Digital currencies represent a new paradigm and a tectonic revolution in the monetary landscape.

Evolution in the cards Landscape

Within the cards busine, the tokenization of cards is increasing, reducing the friction, whilst keeping the security.
Tokenization is the process of protecting sensitive data by replacing it with an algorithmically generated number called a token. Often times tokenization is used to prevent credit card fraud. In credit card tokenization, the customer’s primary account number (PAN) is replaced with a series of randomly generated numbers, which ares called the “token.” These tokens can then be passed through the internet needed to process the payment without actual bank details being exposed. The actual bank account or credit card number is held safe in a secure token vault.

 

Evolution in the payments world

Following a three-month public consultation, the EPC (European Payment Council) has published on 30/11/2020 the first version of the SEPA  Request-To-Pay (RTP) scheme rulebook.  The Request to Pay (RtP) is an umbrella term for several scenarios in which a payee takes the initiative to request a specific payment from the payer.

The scheme covers the set of operating rules and technical elements (including messages) that allow a Payee to request the initiation of a payment from a Payer in a wide range of physical or online use cases. The scheme can be considered as a complement to the payment flow because it supports the end-to-end process and lies between an underlying commercial transaction and the payment itself. An RTP as such can be seen as an enabler for digital payments.

The first release of the SEPA RTP scheme is scheduled to go live on 15/6/2021. The SEPA RTP scheme, combined with the SEPA Instant Credit Transfer could be a challenger for card payments, being much cheaper for the merchants. It might take some time to take off.

Conclusion

This conference was a good forum to get an insight in the Belgian FinTech market. I saw a lot of interesting initiatives and consider that Fintech will bring a lot of added value in the payments and corporate treasury landscape.

If you want to learn more on this topic, I invite you to attend the one day training session, which I animate on the topic on 16/12/2020 “PSD2 & Open banking: impact on the financial ecosystem and new challenges

 

François de Witte
Founder & Senior Consultant at FDW Consult
Managing Director and CFO at SafeTrade Holding S.A.
treasuryXL ambassador

Digital Finance Summit | The World After | 24 November 2020

| 20-11-2020 | François de Witte | treasuryXL |

Only 4 days left for the Digital Finance Summit, the highly renowned conference focusing on the ever-increasing digitalisation of the financial industry, is back again this year to set the path for a bright and more dynamic future at the heart of Europe.

Digital Finance Summit is at the crossroads between Tech Talent, Regtech, Cloud Computing, Big Data, Blockchain, Crypto-assets, Artificial Intelligence, Crowdfunding, Cybersecurity and Banking. It gathers global innovators looking to get inspired by a unique blend of industry leaders and turboboost the whole European FinTech ecosystem!

ONLINE EVENT | NOVEMBER 24 | 2020

Due to the current sanitary situation, this year’s edition goes entirely ONLINE!

For the 5th year in a row, FinTech Belgium is preparing a creative programme spread over 3 stages with Keynotes, Workshops and the European FinTech Pitch Battle!  And, of course, be prepared for the most qualitative networking in Digital Finance in Belgium!

REGISTER NOW!

 

 

 

Corporate Governance and Treasury | Embrace the Corporate Treasury Policy

| 18-02-2020 | François de Witte | treasuryXL |



Corporate Governance

Corporate Governance is a mechanism through which boards and directors can direct, monitor and supervise the conduct and operation of the corporation and its management in a way that ensures appropriate levels of authority, accountability, stewardship, leadership, direction and control.

The ultimate responsibility for Treasury management within an organization lies with the board of directors. Due to the practicalities and technical aspects involved in corporate treasury, the board typically delegates the daily management of risk to responsible individuals in each department. In the case of financial risks, many of these are delegated to the treasurer.

Whilst, due to its specific activities, the corporate treasurer needs to take a lot of actions and decisions independently, it is important that he does this within a framework and Governance. Quite a lot of corporates have formalized this in a “Corporate Treasury Policy”.

Corporate Treasury Policy

The Corporate Treasury Policy is the mechanisms by which the board, or risk management committee (RMC), can delegate financial decisions in a controlled manner. This document should be a summary of all the principles approved by the Board or the Financial Committee of the Board as a mandate of the Board to the treasurer (the Treasury Mandate).

The Corporate Treasury Policy is a framework document, which covers the following areas:

Organization of the Treasury Function

In most of the companies, the Corporate Treasury Reports to the CFO. The CFO is usually himself a Member of the Executive Committee, which itself reports directly to the Board of Directors. (Treasurer – CFO – Treasury Committee – Audit Committee – Board):

A policy should set out clearly which decisions are delegated to the treasurer and when the treasurer should refer a decision back to the board or other person within the organization. Within several corporate, the Board of Directors have delegated the decision process to dedicated committee, like the Risk Committee, and the Liquidity and Funding Committee.

Treasury Control Framework (including the Code of Conduct)

Procedures and controls to manage the risk should be put in place to provide an overall framework for decision-making by the treasury team.

Ideally, this should also include a code of conduct. The Corporate Treasurer should act as a Corporate Custodian. In other words, he is Protector of the company’s assets, and should act according to a strict Code of Conduct and Ethics. There exist examples of codes developed by professional organizations such as IGTA, ATEB, AFTE, ACT and ATEL.

Liquidity and funding

The board should be informed about funding possibilities to put currency, maturity, cost and equity/debt character into a wider context. The board should decide on the strategy but can delegate fund raising decisions and actions to treasury. However, I recommend that Treasury asks the final board approval for strategic decisions (e.g. major syndicated loans, bond issues, etc.).

The board should have an overall view on the liquidity risk of the company. The Board should also define the financial policy, covering the gearing and maturity issues, fixed and variable interest rate obligations, dividend policy and covenants.

Banking Relationship

Banks chosen by the treasurer must be able to meet the needs of the organization, both domestically and internationally. I recommend that the Board approves annually criteria for selecting the banks with whom it will work.

Risk Management

The Treasurer must identify the various risks to which the company is exposed, quantify the impact, and should inform the Board thereof. He should estimate the size of these exposure risks and their impact on the he overall operations and financial performance of the company, and make recommendations in these areas

The board must approve the hedging policy, the company’s foreign exchange, interest rate and commodity risk management policy and its attitude to risk. It should define which part of the risks must be hedged and the hedging horizon. I recommend that the Treasurer submits at regular intervals to the Board the list of authorized instruments, the amount per instrument and their term

Investment Policy – Counterparty Credit Risk

The board should approve the treasury’s Investment policy including the choice of instruments, the list of counterparties used + the maximum amount/counterparty & maturity. It is recommended that the Board provides guidelines and limits per instrument.

It is recommended that the Board approves the guidelines for fixing counterparty limits, and maximum exposure per counterparty.

Authorized instruments and Arrangements – Authorized Approvers

The Treasurer should make sure that the board must understands and approve the strategies and instruments used and sets guidelines for the appropriate limits for their use. These guidelines need to ensure that treasury has not sacrificed long-term flexibility or

survival for short-term gain, especially in view of the volatile financial market’s situation.

Treasury Operational Risk

The treasurer should make the Board aware of the operational risks to which the company is exposed. He should provide recommendations in this area. Furthermore, the treasurer should also submit recommendations to the board on the treasury organization and the ways to reduce the operational risks.

Monitoring

A Corporate Treasury Policy has only sense, if there is a regular follow up and control framework; Hence procedures and controls to manage the risk should be put in place to provide an overall framework for decision-making by the treasury team.

It is also important to provide to the Board a regular update on the way the treasurer complies with the policy. The policy should also be regularly reviewed.

Treasury must alert the board to external changes and internal strategic developments, which may have long-term implications for the organization and make proposals for managing them.

The policy needs also to be reviewed at regular intervals each “Policy” in function of the market and of other internal or external developments. I recommend having treasury on the Board’s agenda on a quarterly basis.

Conclusion

Treasury is not an island in the company. It is closely linked to the corporate governance. Hence it is important to define the right framework.

I recommend to corporates to put in place a treasury policy validated by the Board of Directors and reviewed regularly. It is important to update the Board at regular intervals about strategic topics, such as strategic financing topics and risk management.

The treasurer has also an important educational role, as he must be able to make complex treasury topics understandable for the board members.

Hence there must be a good interaction between the treasurer, the CFO and the Board is key, where the Treasurer is the linking pin.

 

François de Witte
Founder & Senior Consultant at FDW Consult
Managing Director and CFO at SafeTrade Holding S.A.
treasuryXL ambassador

Back to the old days: Currency jargon in forex trading

14-01-2020 | Marco Lassche |

Nowadays the youth use apparently ‘stacks’ as a nickname for money. In forex we use already for a long time nicknames…

 

Recently I heard my son talking to one of his friends on the play station: “Hey bro, we need more stacks to go to the next level.”

When I asked him what is stacks: “Dad come on, you don’t know? Maybe you are getting too old for this (41?). Everybody knows that stacks is money.” Ouch…
My ‘old’ brain went back in time and this felt a bit like my first steps in the world of FOREX trading. At that time no electronic forex trading platforms were used. We traded still directly with banks / brokers by phone or Reuters messenger. Instead of Bro we used Mate. Instead of stacks we used the nicknames for the different currencies. For me the first days it felt like I was ended up in a scene of the Tower of Babel.

“Hey Mate, I need a Cable (GBP/USD) in two”. Later on I understood, this meant I want a price quote for a GBP/USD in 2 million GBP at which you can buy/sell GBP against the USD.

Now you know that stacks is money, and a cable is GBP/USD, it is time for some more nicknames in currency (pairs), and some background explanation:

Please feel free to contact me if you need any further information or assistance in setting up a more professional framework for controlling your financial risks and cash management in a more efficient way.

 

 

 

Marco Lassche 

Founder and Owner of at Bedrijfskostenexpert
Treasurer and Project Manager at Van Caem Klerks Group
treasuryXL Ambassador

Why are you still paying too much banking costs? There is a simple solution to save money

2-12-2019 | treasuryXL | Vallstein |

Do you have full transparency in your banking cost? Do you fully trust your bank(s)? You can easily save a significant amount of money and create strong ties with your bank(s) for a better relationship.

We interviewed Huub Wevers, Head of Business Development at Vallstein, he will take a deeper dive into the advantages of using WalletSizing® , give you a better insight and even shares a success story.

Can you tell something about WalletSizing® ?

WalletSizing® is a SaaS platform with a number of modules that gives Corporates full transparency on how much they spent on their banks and how profitable they are for their banks. A CFO would like to be able to drive the meetings with the bank supported by independent data showing exactly what a corporate is doing with the bank AND how profitable the corporate is for the bank. This is exactly what WalletSizing® delivers. WalletSizing® drives the focus and strategy of the meeting by showing how much a corporate is spending on their banks and how profitable they are for their banks. It ensures that a corporate gets value for money from their relationships with their banks.

An additional module of WalletSizing®, the bank fee edition is able to upload all bank invoices for cash management and comparing them with the original price agreements. Am I paying the price as agreed during the RFP phase?

WalletSizing® the Bankfee edition, can be used together with the other WalletSizing® modules or stand alone.

This module uploads all bank invoices (any format) for cash management and audits them with the original price agreements: Am I paying the price as agreed during the RFP phase? Are there unforeseen billing charges? I was not aware of these unusual situations like:

  1. a) manual payments,
  2. b) investigations,
  3. c) volumes… leading into continuous internal processes improvements.

WalletSizing® Bankfee edition is all about Automation, Control and Transparency, down to account level and including tailor made reporting for Auditors and Control teams. WalletSizing® Bankfee edition it is not a daily reconciliation system. It is an audit process that can be ran in different frequencies as those fits’ client requirements.

What is, in your perception, the biggest benefit of using WalletSizing® ?

Let me explain the following questions that WalletSizing® answers:

  • How much am I spending on my bank products & services?
  • How profitable am I for my banks?
  • Is the above fair?

The last question is the most important one and can be answered through the benchmarking capabilities of WalletSizing® and the underlying methodology. WalletSizing® is calculating the exact profitability on the basis of the relevant credit ratings, bank fees and the latest Basel III/IV regulations.

Another benefit is during the RFP or price revision process where the proposed prices from the Banks are also uploaded in the system and amongst other criteria, compared with the Vallstein Benchmark. This benchmark is a Vallstein property owned database with hundreds of thousands of data points collected over the last 20 years.

How does the customer project phase look like from start till actual use?

A typical WalletSizing® project takes 6 weeks where Vallstein will handle most of the work, typically 90%. We will gather all necessary data and integrate, translate and upload into the system. Through a number of workshops we ensure the client domain is 100% accurate and the client is versed in making the analysis and acting on it. “Having learned how to fish instead of just been given a fish” as the saying goes. During the project we will also set-up and agree how to continue maintenance of the system, ensuring an up to date system.

How fast can customers experience the impact of WalletSizing® after implementation?

Already during the implementation clients will be able to get benefits from the system by detecting missing bills. After an implementation, clients can immediately review their bank relationships and typically will reach very significant savings in their banking costs through that. And on the long run, clients will have more transparent and better relationships with their banks. When you have clarity on how much you are really paying, you have time to talk about more strategic topics with your banks.

What was your biggest challenge with WalletSizing® ?

The biggest challenge with WalletSizing® we had over the last 20 years is the data quality of the banks and the speed at which they deliver the data to our clients.  Fortunately this is improving due to invoice standards like CAMT.086 and a more shared belief in transparency in the market place. Things have changed for the better and we hope that we have and are contributing to that.

Can you share a great WalletSizing® success story?

A client of ours implemented WalletSizing® Bank Fee Edition. We Started with 9 Banks, 12 countries and 170 different accounts. We have now made the bank process completely automatic. Banks are sending the required and detailed fees data on a quarterly basis and this data is being uploaded into the system.

We found no unique and individual product codes across the banks. Product descriptions are not clear and fees are not consistent across the same billing items and accounts. This has been resolved completely by the system which is now automatically mapping all billing items into unified product names and codes. It is more easy now to compare different banking terms and conditions and market benchmark. Needless to say significant savings and 100% transparency has been achieved.

After this implementation the client agreed that they now had done the difficult part of Bank Relationship Management (Cash Management Fees) and were interested to pursue the analysis of the full banking wallet across all their banks. An exercise to understand the current situation, reduce the number of banks, but with full visibility across all banks on how much business and how profitable they were right now. In the end the client reduced their number of banks from 17 towards 9 and have an even spread of their business (Wallet) across all their banks.

visit Vallstein.com

You are only one step away from saving a lot of money

Huub is thrilled to help you. Fill out the contact form and we arrange a call for you.

Recap ATEL Annual Conference 2019

| 22-10-2019 | François de Witte | treasuryXL |

Each year in the 3rd week of September, ATEL, the Luxembourg Association of Corporate Treasurers, organizes its Annual Conference. This year the ATEL Annual Conference was held on September 19, 2019. It was a very special edition, as it coincides with the 25th anniversary of the creation of ATEL. There were over 200 participants, and this was a good opportunity to have snapshot of some recent tendencies in treasury.

“The annual conference is a great way to take stock of the sector’s developments while celebrating our quarter-century run in a friendly atmosphere,” stated François Masquelier, Chairman of ATEL and Deputy Chairman of the EACT.,

The Conference started with a series of workshops. I followed the one on Cybersecurity in Treasury, given by BNP Paribas, and the one on “®evolution of Payments” given by BearingPoint.

BearingPoint expect major changes due to Instant Payments. The existing solutions to obtain customer information on the receipt of payments are not enough anymore.  Corporations require immediate information on received payments. The Westhafen Expert Dialogue has defined immediate customer information of received payments as a best practice. The format used is the Credit-notification N54 defined based on the camt.054. The proposed transmission channel is either via API: Incoming payments are transferred from the bank to the corporation via a web-service-notification (HTTPS, push) or the through the banking server (EBICS.

The plenary session started with a video of Finance Minister Gramegna congratulating the association on its 25th anniversary and coming back on the establishment of the euro as a great accelerator for the profession and underlining Luxembourg’s key role in maintaining a positive environment for treasurers.

Isabelle Badoux presented Sanofi’s treasury transformation journey focusing on centralized treasury, central bank interaction and the conception of a “payment factory.”

Luca Lazzaroli, then presented the EIB, the largest multilateral lender and borrower in the world. The institution invests over € 1.2 trillion in innovation, environment, infrastructure and SMEs with a special accent on sustainable growth in Europe.

Vincezo Dimase from Refinitiv concluded the plenary session by presenting the challenging transition from LIBOR the so-called ARR (Alternative Reference Rate – e.g. the ESTER – Euro short term rate, which will replace the EONIA). By the end of 2021, the financial sector will abandon the IBOR, and this will have a major impact on the corporate treasurers, as several long-term contracts using the IBOR go beyond end 2021.

Following on this conference we had a nice get together with all the participants where I had interesting exchanges of experience. The ATEL Annual Conference was a very good event.

I am impressed by ATEL, who proves to be able in the small country of Luxembourg to group top experts along hot topics in treasury. On 26/9/2019, we also had at the Luxembourg House of Training the official Ceremony where 13 treasury professionals received their “Certified Path in International Treasury Management and Corporate Finance“, organized in collaboration with ATEL. A new session of this Certified Path will be held starting from January 2020. All practical information and program are available here. I was also part of the lecturers and of the jury.

Will you join next year?

François de Witte
Founder & Senior Consultant at FDW Consult
Managing Director and CFO at SafeTrade Holding S.A.
treasuryXL ambassador
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How are largest European companies managing their financial risks?

17-10-2019 | Stanley Myint | BNP Paribas

The second edition of the “Handbook of Corporate Financial Risk Management” has just been published by Risk books. The handbook is written with all risk management professionals, practitioners, instructors and students in mind, but its core readership are Treasurers at non-financial corporations. It contains 43 real life case studies covering various risk management areas. The book aims to cover both financial risk management and optimal capital structure and its contents.

Motivation for the book

This Handbook is based on real-life client discussions we had in the Risk Management Advisory team at BNP Paribas between 2005 and 2019. We noticed that corporate treasurers and chief financial officers (CFOs) often have similar questions on risk management and capital structure and that these questions are rarely addressed in the existing literature.

This situation can and should lead to a fruitful collaboration between companies and their banks. Companies often come with the best ideas, but do not have the resources to test them. Leading banks, on the other hand, have strong computational resources, a broader sector perspective, an extensive experience in internal risk management, and the ability to develop and deliver the solution. So, if they make an effort to understand a client’s problem in depth, they may be able to add considerable value.

The Handbook is the result of such an effort lasting 14 years and covering more than 700 largest European corporations from all industrial sectors. Its subject is corporate financial risk management, ie, the management of financial risks for non-financial corporations.

While there are many papers on this topic, they are generally written by academics and rarely by practitioners. If we contrast this to the subject of risk management for banks, on which many books have been written from the practitioners’ perspective, we notice a significant gap. Perhaps this is because financial risk is clearly a more central part of business among banks and asset managers than in non-financial corporations. However, that does not mean that financial risk is only important for banks and asset managers. Let us look at one example.

Consider a large European automotive company, with an operating margin of 10%. More than half of its sales are outside Europe, while its production is in EUR. This exposes the company to currency risk. Annual currency volatility is of the order of 15%, therefore, if the foreign revenues fall by 15% due to FX, this can almost wipe out the net profits. Clearly an important question for this company is, “How to manage the currency risk?”

The book blends real corporate situations across capital structure, optimal level of cash, optimal fixed-floating mix and pensions, which are particularly topical now that negative EUR yields create unpresented funding opportunities for corporates, but also tricky challenges on cost of cash and pensions management

One reason why corporate risk management has so far attracted relatively little attention in literature is that, even though the questions asked are often simple (eg, “Should I hedge the translation risk?” or “Does hedging transaction risk reduce the translation risk?”) the answers are rarely simple, and in many cases there is no generally accepted methodology on how to deal with these issues.

So where does the company treasurer go to find answers to these kinds of questions? General corporate finance books are usually very shy when it comes to discussing risk management. Two famous examples of such books devote only 20 – 30 pages to managing financial risk, out of almost 1,000 pages in total. Business schools generally do not devote much time to risk management. We hope that our book goes a long way towards filling this gap.

Website

We invite the reader to utilise the free companion website which accompanies this book, www.corporateriskmanagement.org There, you will find periodic updates on new topics not covered in The Handbook. Much like the book this website should prove a useful resource to corporate treasurers, CFOs and other practitioners as well the academic readers interested in corporate risk management.

About the authors

Stanley Myint is the Head of Risk Management Advisory at BNP Paribas and an Associate Fellow at Saïd Business School, University of Oxford. At BNP Paribas, he advises large multinational corporations on issues related to risk management and capital structure. His expertise is in quantitative and corporate finance, focusing on fixed income derivatives and optimal capital structure. Stanley has 25 years of experience in this field, including 14 years at BNP Paribas and previously at McKinsey & Company, Royal Bank of Scotland and Canadian Imperial Bank of Commerce. He has a PhD in physics from Boston University, a BSc in physics from Belgrade University and speaks French, Spanish, Serbo-Croatian and Italian. At the Saïd Business School, Stanley teaches two courses with Dimitrios Tsomocos and Manos Venardos: “Financial Crises and Risk Management” and “Fixed Income and Derivatives”.

Fabrice Famery is Head of Global Markets corporate sales at BNP Paribas. His group provides corporate clients with hedging solutions across interest rate, foreign exchange, commodity and equity asset classes. Corporate risk management has been the focus of Fabrice’s professional path for the past 30 years. He spent the first seven years of his career in the treasury department of the energy company, ELF, before joining Paribas (now BNP Paribas) in 1996, where he occupied various positions including FX derivative marketer, Head of FX Advisory Group and Head of the Fixed Income Corporate Solutions Group. Fabrice has published articles in Finance Director Europe and Risk Magazine, and has a master’s degree in international affairs from Paris Dauphine University (France).

Content:

Introduction

1 Theory and Practice of Corporate Risk Management *

2 Theory and Practice of Optimal Capital Structure *

PART I: FUNDING AND CAPITAL STRUCTURE

3 Introduction to Funding and Capital Structure

4 How to Obtain a Credit Rating

5 Refinancing Risk and Optimal Debt Maturity*

6 Optimal Cash Position *

7 Optimal Leverage *

PART II: INTEREST RATE AND INFLATION RISKS

8 Introduction to Interest Rate and Inflation Risks

9 How to Develop an Interest Rate Risk Management Policy

10 How to Improve Your Fixed-Floating Mix and Duration

11 Interest Rates: The Most Efficient Hedging Product*

12 Do You Need Inflation-linked Debt

13 Prehedging Interest Rate Risk

14 Pension Fund Asset and Liability Management

PART III: CURRENCY RISK

15 Introduction to Currency Risk

16 How to Develop an FX Risk Management Policy

17 Translation or Transaction: Netting FX Risks *

18 Early Warning Signals

19 How to Hedge High Carry Currencies*

20 Currency Risk on Covenants

21 Optimal Currency Composition of Debt 1:

Protect Book Value

22 Optimal Currency Composition of Debt 2:

Protect Leverage*

23 Cyclicality of Currencies and Use of Options to Manage Credit Utilisation *

24 Managing the Depegging Risk *

25 Currency Risk in Luxury Goods *

PART IV: CREDIT RISK

26 Introduction to Credit Risk

27 Counterparty Risk Methodology

28 Counterparty Risk Protection

29 Optimal Deposit Composition

30 Prehedging Credit Risk

31 xVA Optimisation *

PART V: M&A-RELATED RISKS

32 Introduction to M&A-related Risks

33 Risk Management for M&A

34 Deal-contingent Hedging *

PART VI: COMMODITY RISK

35 Introduction to Commodity Risk

36 Managing Commodity-linked Revenues and Currency Risk

37 Managing Commodity-linked Costs and Currency Risk

38 Commodity Input and Resulting Currency Risk *

39 Offsetting Carbon Emissions*

PART VII: EQUITY RISK

40 Introduction to Equity Risk*

41 Hedging Dilution Risk *

42 Hedging Deferred Compensation*

43 Stake-building*

Bibliography

Index

Note: Chapters marked with * are new to the second edition