Cash & Liquidity Management

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A Pan-Regional Approach to Liquidity and Bank Connectivity PSA Peugeot CitroŽn work with more than 50 banks across the group, which makes it important to have an efficient structure to achieve transparency and control over cash. Consequently, PSA have a centralisation strategy to consolidate group cash on a daily basis across both commercial and financial entities.

Its focus during 2009 has been the integration of CEE cash management activites with the rest of Europe. This has been accomplished in partnership with Societe Generale. Rationalisation of payments is next on the agenda, with plans to implement SWIFT connectivity with all the firm's subsidiaries.

A Pan-Regional Approach to Liquidity and Bank Connectivity

by Benoît Mulsant, Treasury Manager, PSA Peugeot Citroën

Our team is in charge of cash and treasury management for PSA Industrial and commercial companies as well as the one for Banque PSA Finance.

We work with a large number of banks across the group, currently more than 50, which makes it important to have an efficient structure to achieve transparency and control over cash. Consequently, we have a centralisation strategy to consolidate group cash on a daily basis across both commercial and financial entities. In Europe, we achieve this using a euro-denominated physical cash pool with Societe Generale, in which cash held in multiple accounts across all of our banks in Europe is zero-balanced into a header account.

A pragmatic approach

Having implemented our cash management solution in western Europe, an important area of focus during 2009 has been the integration of our Central & Eastern Europe (CEE) cash management activities with those in other parts of Europe.

We adapted our use of bank connectivity tools according to the level of sophistication required in each country.

Our key objectives were to concentrate liquidity across all of our countries in CEE, to achieve greater visibility and control, and to leverage the cash management tools we were using in other parts of Europe. We decided to work with Societe Generale on the basis of our existing relationship. We were impressed by their extensive network in CEE (fig 1). By leveraging this network and our existing relationship, we were able to implement a pragmatic cash management approach in each country, including cash concentration. We adapted our use of bank connectivity tools according to the level of sophistication required in each country, including using Sogecash Net International in countries with reasonably straightforward cash management requirements, and ETEBAC 5 (Sogecash Remises and Sogecash 101) in others.

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