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Managing Settlement Risk at National Express National Express has a centralised group treasury function, plus local treasurers based in each of their key regions, the UK, North America and Spain. To cope with increasingly complex international treasury requirements they have recently implemented the Wallstreet Treasury ASP solution, to replace the use of spreadsheets, which they considered was no longer a sufficiently solid or reliable way of managing their activities. The company has achieved significant benefits in control over inter-company funding, accounting, risk management and disaster recovery as a result.

Managing Settlement Risk at National Express

by Mike Dixon, Assistant Group Treasurer, National Express plc

National Express is one of the world’s leading international public transport groups, with an annual turnover of £2.6 billion. Over one billion passengers a year use its services in the UK, North America and Spain. The company has 43,000 employees across three continents. Its 20,000 vehicles worldwide provide bus, coach, train, tram, school bus and airport transfer services.

The company has its roots in the formation of the state-owned National Bus Company in the UK in the 1960s; following its flotation in 1992, the renamed National Express Group expanded by acquiring businesses privatised by national and local Government. The company has developed a strong reputation for successfully transferring companies from the public to the private sector, primarily in the UK but also overseas.

To cope with its increasingly complex international treasury requirements, National Express Group implemented the Wallstreet Treasury ASP solution.

Treasury Organisation

We have a centralised Group Treasury function at National Express, with three people who manage the Group’s funding requirements, interest rate, currency and commodity hedging programmes and group cash management. In addition, we have local treasurers based in each of our key regions, namely the UK, North America and Spain, who manage local payments and collections.

Since implementing the solution, we have the comfort of a complete deal database, replacing the many spreadsheets that were in use before.

Before implementing Wallstreet Treasury, we had managed our activities using spreadsheets. However, due to the growing complexity of our hedging, funding and performance bond requirements and the increasing sizes of transactions, spreadsheets were no longer considered a sufficiently solid or reliable means of managing our activities.

We therefore decided that we needed a robust solution that would cope with expanding numbers of large deals, help us to manage exposures, reduce settlement time and increase accounting efficiency without the need to add further resources or incur high system licensing or maintenance costs.

The Solution

We made a comprehensive study of five or six different solutions, eventually concluding that the ASP model offered by Wall Street Systems (Wallstreet) was the best fit in terms of ability to manage settlement risk, cost, ease of use and low maintenance.

We implemented Wallstreet Treasury in the UK based Group Treasury, initially focusing on money market, foreign exchange and interest rate hedging. As the volume of transactions was still relatively small, we were able to implement the solution within two months. As the solution is deployed on an ASP basis, we did not need to source additional internal or external resources, including IT, so our costs were limited to the price of the solution as opposed to incurring additional costs.

The Benefits

We achieved our initial objectives of reducing our settlement risk and also reducing our costs beyond the cost of the system. Since implementing the solution, we have the comfort of a complete deal database, replacing the many spreadsheets that were in use before, with its less repetitive manual input and so greatly reducing margin for error. As a web based system, together with a web based banking solution, we can access all the key elements of our treasury infrastructure from anywhere, which is very convenient for home working or business travel and, more importantly, for improving our disaster recovery arrangements.

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