Corporate Treasury in Germany 2015 – An Introduction

by Robin Page, Chief Executive, TMI

We are delighted to present our annual guide to corporate treasury in Germany, which is comprised of three articles written by hands-on practitioners at the top of their profession, which provide valuable insight into some of the issues heading the agendas for those treasurers doing business in Germany today.

Kate Pohl, writing with Hans Sawatzki, and Yesim Erdem Onat, ING, notes that multinationals are constantly having to find additional finance to fund working capital rather than growth. While European companies are making significant improvements in this regard, their performance continues to lag behind the rest of the world, with the predictable impact on competitiveness and expansion. To address this, treasurers and finance managers of German corporations are becoming proactive in identifying and delivering on opportunities to enhance working capital.

Markus Straussfeld and Alfredo Bresciani of UniCredit tackle the topic of digitisation, which increasingly affects all of us, and show how new digital processes such as e-billing CBILL, MyBank and virtual accounts are the key to achieving the scalability and risk management required to meet the near-future’s challenges and opportunities. They point out that one of SEPA's main benefits is improved account administration as it permits corporates to consolidate their existing accounts into a virtual account structure which enables a single physical account to be sub-divided into any number of virtual accounts – increasing both transparency and control.

Martin Winkler of Schwabe, Ley & Greiner considers what can be achieved by the use of FX risk management models, with particular reference to the recent cancellation of the CHF/EUR minimum exchange rate by the Swiss National Bank, which caught so many firms unprepared. Regular stress tests are vital, he emphasises, and it is also important to keep the development of FX risk under observation, with possible fluctuations in market price under constant review. SLG’s own new total risk tool, Gesamtrisiko-Tool, enables quantification of risk and comparison of hedging strategies, as well as analysis of interest rate risk and commodity pricing risk.