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Treasury & Capital Markets
Treasurise Awards 2024: Driving corporate treasury behaviour
How the Best service providers in MENA and South Asia address their clients’ pain points
The Asset 9 Apr 2024

For banks, the client’s needs are a powerful force that leads to innovation and excellence. This is especially true in the Middle East and North Africa (MENA), where service providers have focused on addressing clients’ pain points through various ways, from a simple extension of the cut-off times for payments to implementing a regional treasury connectivity solution to centralize operations.

These, in fact, constitute the trends that are driving corporate treasury behaviour in the region, as treasurers look for, among other things, solutions to manage their funds centrally to support their daily operations more efficiently.

Corporate clients in MENA are increasingly turning to automation and digitization to address inefficiencies due to manual processing. Digital solutions are being implemented, for instance, to enhance working capital management and payment activities, as well as provide automated reconciliation process.

Clients in the region also have the option to implement either Islamic or conventional type of solutions and products, which differentiate a number of service providers from the competition. Standard Chartered, for instance, launched Islamic receivable services as well as an Islamic sustainable account in the United Arab Emirates (UAE).

For its part, HSBC launched a Shariah current account for corporates on the back of the growing clients’ requirements. Like a conventional current account, this non-interest-bearing and non-profit current account meets Shariah principles for clients taking either Islamic lending or trade Shariah-compliant products.

Focus on sustainability

Banks are also committed to sustainability in the region. Standard Chartered issued Qatar’s first green guarantee for a solar power project. It designed the instrument to support the project, which will be a catalyst in the country’s climate change action plan while supporting its efforts towards energy independence.

HSBC, meanwhile, provided a US$10 million green financing to its client, Al Salaam Limousine, to acquire 250 new electric and hybrid limousines, which are aligned with the company’s environmental, social and governance (ESG) agenda and with the UAE government’s sustainability plans.

Over in the South Asia region, the banks continued to invest and rolled out new products and solutions to enhance their suite of offerings across payments, liquidity, supply chain and risk management. Standard Chartered invested about US$20 million in transaction banking projects in India, including investments in technology, a future-ready platform, systems and digitalization.

Deutsche Bank, as part of its ongoing expansion and investment, rolled out SmartDoc in India, which digitizes documentation for FX workflows, with robotics process automation (RPA) solution built in.

This comes as the German bank suffered a slight decline in trade in India due to margin compression amid a significant outperformance in its cash business. However, this was outweighed by volume growth – particularly in GIFT City – driven primarily by structured trade and ESG financing. GIFT City offers company-friendly policies and has unlocked opportunities previously hampered by branch limitations among banks. It offers tax benefits and exemptions, making it an attractive proposition for both domestic and international investors.

Standard Chartered’s GIFT City branch offers a comprehensive array of documentary trade and open account products, including invoice financing, negotiation under letter of credit, supplier finance, guarantees and more, as the bank caters to clients’ cross-border requirements. Its GIFT City trade book crossed a key milestone of US$1 billion in 2023, or about 35% higher than the 2022 level.

Supply chain finance

As in previous years, India saw a large demand for supply chain finance solutions, which may involve the provision of multi-currency export receivables facility, supplier finance facility, or receivables purchase and vendor finance facility. Such solutions are designed to accelerate the conversion of receivables into cash, hence reducing their days sales outstanding (DSO) and improving the overall working capital, as well as enhancing their days payable outstanding (DPO) position without impacting the cash flows of the suppliers. Several of the supply chain finance solutions are executed in partnership with fintechs, achieving in the process seamless and digitized implementation procedures.

Many of the supply chain finance solutions are related to dealer/distribution finance, also described as channel finance, which is an important component of supply chain finance – and ensures the timely availability of funding.

India’s focus on renewable energy continues to offer banks with opportunities in terms of providing working capital facility or cross-border guarantees to meet their clients’ sourcing requirements at competitive cost. These types of deals also enable the banks to demonstrate their ESG commitment and their drive towards sustainable finance.

In MENA, the award for Best in Treasury and Cash Management goes to HSBC, while Standard Chartered is voted Best in Working Capital and Trade Finance.

In South Asia, Deutsche Bank wins the award for Best in Treasury and Cash management, while Standard Chartered secures the honour for Best in Working Capital and Trade Finance.

For the complete list of winners of Best service providers in MENA/South Asia, please click here.

To learn more about these awards, please click here.

To join the in-person annual celebratory dinner on May 14 2024 in Hong Kong, please contact us at celebrate@theasset.com.

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