Corporate treasurers in Asia are ready to make big spending decisions again, according to Sridhar Kanthadai, Citi's new Asia-Pacific treasury and trade solutions head.
"Clients are beginning to make decisions again," he said. "During the last three months, in significant contrast to the first six months of last year, there were a significant number of decisions being made in the treasury management space. The pipe has opened up again."
Not that the pipe was ever sealed off completely. When credit markets shut down in late 2008, companies limited the growth in expenditure until it became clear what direction the global economy would take. When the slowdown proved less severe than anticipated, and Asia's capital markets returned to normal levels last year, investments in treasury solutions were once again given the go ahead.
"Some of the complex deals our team is working on involve tens of countries and [are worth] upwards of $10 million," said Kanthadai. "Who would have thought we'd have deals in this space worth that much per annum."
Hong Kong-based Kanthadai, who took over as regional treasury and trade solutions head at the US bank last month after the sudden departure of Ivo Distelbrink, said he plans to continue with Citi's strategy of being a "trusted advisor" to its customers. "There is no real change in strategy or direction," he said. "We've stepped up engagement with clients and our treasury and trade product innovation."
In the position, Kanthadai manages Citi's cash, trade and finance solutions business and is responsible for its strategic direction and product development in the region. He was previously Asia-Pacific chief operating officer for global transaction services (GTS) at the bank. Kanthadai has also held various senior roles in receivables, liquidity and investments within Citi's Asian cash management business.
He reports to Anthony Nappi, Asia-Pacific regional head of global transaction services at the bank, and Paul Simpson, global head of treasury and trade solutions.
Distelbrink moved to Bank of America Merrill Lynch where he became that institution's new Asia head of global treasury services.
Cash and trade products are big business for Citi. While Kanthadai would not specifically discuss new releases that the bank is developing, he did discuss a number of improvements and innovations his team is working on for the existing product suite.
"We're building out our cards platform [in Asia], we will launch our next generation internet banking platform CitiDirect BE this year and we're launching electronic bank account management," he said. "Ideas are never the problem for us."
Kanthadai spoke at length about the bank's pre-paid card proposition in Asia. The solution allows companies to use plastic to replace large volumes of low-value cash or cheque payments. The cards, pre-loaded with a specific value, act like typical credit or debit cards, allowing the recipients to make purchases at retailers or withdrawal money at ATMs. He cited airlines, car dealerships or regular government payments, such as pensions, as examples where pre-paid cards are being used.
"Pre-paid cards are convenient, take the cash out of the equation, take paper out of it and take reconciliation out of it," said Kanthadai. "There are a number of benefits to help clients improve their [treasury] applications."
Whether its pre-paid cards or new analytics capabilities created by the roll-out of CitiDirect BE, Citi is prepared to offer its cash and trade customers robust solutions that meet their diverse treasury needs. Kanthadai's appointment is not so much a change in strategy as an affirmation of how the institution is dedicated to moving beyond its historically siloed approach to cash and trade and offer customers a one-stop treasury shop.
But not all that glitters is gold. Citi had a challenging year in 2009 when Asia-Pacific GTS revenue fell 6% year-on-year to $2.5 billion. That said, credit is still due to Nappi and his team for increasing the business's net profit by 3% over the same period to $1.2 billion.
Now the challenge is on for Kanthadai and his treasury and trade solutions team to deliver the goods that will help Citi win back that $168 million worth of Asia-Pacific business.
