Breaking down treasury silos

Putting its money where its mouth is, Citi's appointment of Ivo Distelbrink as managing director and head of treasury and trade solutions for Asia-Pacific and Japan demonstrates the bank's new emphasis on client relationships. Appointed to the new position this week, the Citi veteran is excited about the opportunity to break down barriers and keep building those ever-important corporate treasurer relationships. 

What is your goal as Asia-Pacific treasury and trade solutions head?
To continue to grow our leadership position in the region. One of the primary objectives for me in my new role is to break down barriers and silos between different parts of our organisation to enhance the client experience -- being it the integration of our product and client sales management organisation; the integration of our cash management, trade finance and trade services business; or the integration of our country and regional structures. I really believe that by breaking down these three structures it will allow us to give ever more meaning to supply chain and working capital management, market buzz words often quoted, but something that has proven difficult for many banks to give meaning to from a client perspective. As we integrate our business we plan to drive a much more meaningful cash management and trade finance proposition across the financial supply chain for our clients.

Simply put, the thinking behind putting the product and business management side of the business together with the sales and client management side is to become ever more client-focused in our business. We are making sure we continue to meet the needs of our clients across the cash management and trade space, needs that we see continuing to evolve very rapidly. It's a great opportunity for me to run this business end-to-end, integrated and client-focused, making a difference to our clients.

Why is it important to further client relationships?
We are leveraging the full range of tools available including innovation, technology and training to ensure we deliver top service levels. A hallmark of Citi is our track record in innovation and product development, leading the market with new treasury and trade solutions across the region. The only way to continue our track record in innovation is by remaining 100% client-focused and client-centred. Ultimately it is our clients that tell us where to focus, what to invest in, and which new platforms and technologies to drive.

How has the credit crisis impacted the treasury management business?
In many ways the credit crisis has been a blessing in disguise for the transaction banking business. Now, more than ever, treasury and working capital management are top of mind for corporate treasurers and CFOs. This is driving interesting new opportunities for our products and solutions.

There is much we can do in our business, with our treasury and trade solutions, to help our clients navigate the current environment -- optimising balance sheets, minimising working capital by accelerating cash conversion cycles and mitigating risk across the supply chain. We design our solutions to help our clients manage working capital as a source of funds rather than a use of funds. Historically, working capital often had a negative connotation -- funds tied up on a company's balance sheet -- but nowadays focus is very much on using working capital to release liquidity, to release cash back into an organisation to reduce reliance on external funding sources.

What do you tell clients who are concerned about Citi's problems in the US?
Over the past 18 months, we have endeavoured to be extremely transparent. This high degree of transparency into Citi's true strength, our balance sheet and capital position, has been greatly appreciated by the market.

The fact of the matter is that the publication of the stress test results by our US regulators last week, following a very thorough and robust stress testing process, gives clarity beyond any reasonable doubt that Citi is an extremely well-capitalised firm, with a strong and very liquid balance sheet, and with a very clear strategy in place to capture significant opportunities going forward.

As we have reworked our balance sheet, capital position and strategic focus, we have made it very clear that our international network is core to our global banking strategy and one that we are keen to continue to invest in. Within that proposition, the transaction banking business in general and the treasury and trade solutions business in particular is absolutely core to the firm and our global client franchise.

Has Citi lost any treasury or trade business since the crisis began?
On the contrary. When you look at some of the primary drivers in our business, for example trade assets and client deposits, they are at an all time high for the treasury and trade solutions business in Asia. Our trade assets continue to grow as we put our balance sheet to work in this region for our clients. Core drivers are very strong as our client base continues to grow.

Yes, a number of clients did revisit their treasury policies and counterparty concentration limits, including with Citi, as risk management became top of mind during the crisis. However, Citi was a net benefactor of the resulting flight to quality with good growth in our client and deposit base.

Can you tell me a bit more about why clients are diversifying?
Over the past 12-months, a number of clients have re-evaluated their treasury management policies and counterparty risk across their supply chain. From a liquidity and investment perspective, we are seeing some diversification, yet from a transactional perspective our clients continue to see the benefits of working with a primary bank across the region. As such, we continue to gain significant and meaningful pieces of new cash management business, driven by our superior and consistent solutions across the region.

What new treasury and trade services products can treasurers expect from Citi over the next year?
We have a full slate of initiatives that we are driving and are keen to bring to market across the region over the next 12 months. We have got a number of initiatives in the trade arena as we build a more integrated supply chain proposition and we will continue to invest aggressively into our commercial cards and prepaid cards platform across the region as well as in our client platforms and portals. We plan to bring to market a significantly enhanced internet banking client experience in the next 12 to 18 months with many new functionalities and user interfaces. There's plenty of work to do and plenty of R&D dollars going around.

What is your outlook for treasury and trade services?
Very bullish. The current environment drives meaningful demand for our products and services across cash management, trade and export agency finance. Client demand for our products and services are at an all time high, we have never been busier than we are today.