Based on an interview with James Adams, Group Treasurer, and Shiban Patel, Treasury Analyst, Chalhoub Group
The benefits of centralised treasury operations – and of in-house banks – are today increasing interest to more and more successful corporations in the Middle East.
Key Points
- The successful expansion of the Chalhoub Group led the group to decide, about two years ago, to create a centralised group treasury department at corporate head office in Dubai.
- This would take advantage of economies of scale in FX and cash management and provide improved visibility of cash.
- The article offers suggestions and advice to other companies considering such a step, and summarises the benefits which the Chalhoub Group has achieved through treasury centralisation.
Building a group treasury
About two years ago, the Dubai-based Chalhoub Group’s sustained business success and growth caused the CFO and CEO to decide to establish a group treasury department. The primary reasons for doing so were to take advantage of the economies of scale in the management of foreign exchange risk and of cash, and to improve the visibility and mobilisation of cash, in what was a typically decentralised corporate structure.
At the time, the group had no centralised treasury function. The management team did not have clear, up-to-date visibility of the organisation’s overall cash balances, or of the group’s financial risk due to the rapid pace of growth. Some entities were running cash surpluses, whilst others were overdrawn. Accordingly, the senior management team decided to initiate a project to create a new central treasury operation, at the corporate head office in Dubai.
Sign up for free to read the full article
Register Login with LinkedInAlready have an account?
LoginDownload our Free Treasury App for mobile and tablet to read articles – no log in required.
Download Version Download Version