About
This North America headquartered, global technology provider of water and energy services has operations in hundreds of countries world-wide. The company has multiple subsidiaries across the Asia Pacific region utilising local banking partners for cash management.
The challenge
With decentralised operations around the world, and minimal on-the-ground treasury resources, the treasury team faced considerable challenges in effectively managing liquidity in support of strategic corporate objectives. Treasury determined that head office deployment of its Asia Pacific cash would allow for centralised visibility and control. Such an initiative would give treasury the ability to notionally offset credit and debit positions in different currencies. What was needed was a solution that would require minimal resources and create minimal disruption to existing operations.
The J.P. Morgan solution
- The client requested that J.P. Morgan implement a Multi-entity Multi-currency Notional Pool in Singapore, with a net drain sweep to London in the company’s functional currency (USD).
- The technology provider selected J.P. Morgan because of the bank’s ability to offer solutions without restrictions or limitations; e.g. no tenor or currency limitations to the multicurrency pool.
- The provider worked with J.P. Morgan to establish which entities could participate in the pooling structure. Luxemburg entity and EU passporting rules had to be considered in this determination.
- Implemented multi-bank sweeps leveraging J.P. Morgan’s large multi-bank network, to minimise disruption to the provider’s existing processes with local banking partners.
The impact
- As a result of this initiative, the technology provider has successfully implemented an automated, operationally efficient solution requiring minimal treasury resources on the ground.
- Using this single global platform, treasury now has much needed visibility into cash across the Asia Pacific region, as well as access to synchronized reporting.
- Treasury has been able to consolidate liquidity from third-party banks in local markets, centralising operations and enabling better working capital management.
J.P. Morgan is the marketing name for the Treasury Services business of JPMorgan Chase Bank, N.A. and its affiliates worldwide.
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