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Negotiating the RAPIDS

by Helen Sanders, Editor

The credit crunch has dominated the financial headlines for what seems like an eternity. Although it must (surely!) end eventually, in the meantime treasurers are having to hold their nerve and guide the company’s finances through a landscape eroded of traditional investment and financing opportunities. While balance sheet restructuring and share buybacks were frequent occurrences in the past to deliver return on equity, treasurers are now under pressure to deliver value in an environment where there would seem to be little available. So, with the expert guidance of Andrew Walker, Managing Director, Head of Financing & Risk Solutions at The Royal Bank of Scotland (RBS) - in this article we steer you through the difficult straits and exhilarating rapids of delivering return on equity.

According to a recent Economist Intelligence Unit study, sponsored by RBS, senior executives believe that a decline in business confidence, the challenge of delivering return on equity and the increased cost of borrowing are the most significant effects of the credit crunch on their organisations (fig 1). Fifty-eight per cent of respondents indicated greater pressure in these areas than a year ago.