Cash and liquidity top concerns for treasurers
Cash and liquidity management are the top concerns among corporate treasury departments in Europe this year, says Greenwich Associates.
The research house polled over 2,500 CFOs, finance directors and treasurers across the continent, finding cash allocation and liquidity to be the critical issues.
Two factors have elevated the importance of both areas. The first is that many companies are relatively cash rich following an extended period of low interest rates and favourable credit conditions, but the investment climate remains volatile.
Meanwhile, the exit of RBS from transaction services outside of the United Kingdom last year and pull-backs by other leading banks are causing disruption in the usually calm corporate cash management business.
Because switching costs associated with changing a corporate cash management platform are so onerous, turnover rates among providers traditionally are extremely low.
Amid the volatility caused by shifts in bank business strategies, 20% of European corporate treasury departments name “switching cash management providers” as the top challenge they face in 2016.
Over half (60%) of the large European companies with at least €2bn in turnover use BNP Paribas for corporate banking and 38% use the bank for cash management, according to the survey results.
RBS selected BNP Paribas to act as a ‘referral bank’ for its cash management and trade finance clients affected by the scale back in its global operations last year.
In corporate banking, HSBC ranks second behind BNP Paribas with a market penetration score of 51%, followed by Deutsche Bank at 46% and the trio of Citi, UniCredit and RBS.
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