Citi Pioneers Global RMB Netting Solution with Samsung Electronics

Published 
  • Announcement emphasises significant opportunities for liquidity and working capital optimization to multinational companies

Citi today announced that it has successfully implemented a global RMB netting solution for Samsung Electronics, one of the world’s leading electronic companies.

Samsung Electronics Co., Ltd. (Samsung Electronics), established in January 1969, is one of the leading global technology companies backed by technology advances, diversified portfolio, competitive cost structure and strong brand power. Samsung Electronics has the market leading position in mobile phones, memory chips and home appliances as well as LCD panel, with presence in over 80 countries. As a leader in innovation, Samsung Electronics is also breaking new ground with its efficient treasury management practices.

In March 2015, Samsung Electronics started trading the Chinese Renminbi (“RMB”) directly with the South Korean Won, converting its trading flows between China and Korea into RMB and settling transactions between its headquarters and Chinese subsidiaries more efficiently.

Following this milestone, Samsung Electronics and Citi have pioneered a global RMB netting solution, managed by Samsung Electronics’ global netting center and utilizing Citi’s global platforms and netting services. This solution brings significant opportunities for more effective liquidity management and working capital optimization for Samsung Electronics.

This is a landmark mandate, with Samsung Electronics conducting the world’s first intercompany cross-border netting transaction using RMB, leveraging the most recent nationwide policy reform in China and paving the way for other multinational corporations to follow.

“In-house banks and netting structures are an increasing trend for our clients as they take treasury centralization to the next level. With the rise of RMB as a global currency, and as the leading international bank in China, Citi continues to bring breakthrough RMB cross-border treasury center solutions to market,” said Amol Gupte, Regional Head of Treasury and Trade Solutions, Citi Asia Pacific. “Citi is honoured to be part of this historical transaction, which would not have been possible without the confidence instilled in the market by the Chinese and overseas regulators, especially in Hong Kong and South Korea.”

The internationalization and deregulation of the RMB in China are creating new growth opportunities for Chinese and global multinationals, and Citi has been at the forefront. As one of the first foreign banks to set up a presence in the Shanghai Free Trade Zone (“SFTZ”), Citi has introduced a series of pioneering solutions, including the first automated RMB cross-border pooling, first RMB cross-border treasury center solution, and first automated RMB cross-border sweeping from China to London. Citi was also the first to do a fully automated RMB cross-border pooling outside of the SFTZ in a milestone deal in November 2014.