16 Jul 2015 09:10

New service improves liquidity management in China

SEB is the first Nordic bank to offer customers a possibility to release surplus liquidity in Chinese currency for use in a global cash pool. “By automatically repatriating trapped cash, customers can make their liquidity management more efficient,” says Tommy Adriansson, SEB.

Renminbi, the Chinese currency, is strictly regulated and until now foreign companies have found it costly and difficult to repatriate surplus liquidity from Chinese accounts.

Deregulation however is a trend and Chinese authorities have taken several steps to make the currency more internationally viable. That is why SEB is now able to offer cross border sweeping from Shanghai. Any surplus available in a customer’s Chinese account is thereby repatriated to the company’s global cash pool in for example a Nordic country.

“In this way companies can consolidate the Chinese currency within its global cash pool, enabling them to make liquidity and capital management more efficient. The end result is better financial performance,” Tommy Adriansson says. He is product manager for advanced liquidity products at SEB.

The advantage of consolidating all currencies in a common account structure is that surpluses and deficits between different currencies balance each other, without the company having to manage each account and each currency separately.

“Customers gain a simpler and more efficient handling and reduce the need for credit to cover deficits of separate accounts.”

SEB is present in Shanghai since 2005 and can offer full scale corporate banking services such as accounts, payments and financing. The new service extends the offering further.

“This is a step to further strengthen our liquidity management offering in Asia. The market expects further deregulation and we have technical solutions, and established processes in place to help customers take advantage of this,” says Ida Blom, who has been working with the development of the new service.