best practices in global bank risk and relationship …€¦ · · 2016-04-12best practices in...
TRANSCRIPT
Best Practices in Global Bank Risk and
Relationship Management:
How Walmart Tackles Managing Bank
Relationships Worldwide
Presented by
Amiee Stone, Director Global Treasury, Walmart
Troy Baak, Managing Principal, e5 Solutions Group
October 2013
• e5 company profile
• Walmart company profile
• Selecting partner banks – merging business needs with counterparty capabilities
• Evaluating counterparty risk
• Using technology to simplify
• Bank risk and relationship systems review
• Q&A
Agenda
e5 Solutions Group Profile
A recognized leader in solution design, implementation
services and add-on software for ERP Financials and
Treasury Applications, with proven expertise in all areas of
Treasury and Financial Shared Service Centers.
e5 helps companies:
maximize their return on financial investments
reduce risk
streamline critical finance operations
optimize cash management
enhance corporate performance
Track Record
• Nearly 200 Treasury Projects
• 125 Full Lifecycle Implementations
• 125 different companies
• In over 50 different industries
• Covering North, Central and South America;
Europe, Asia, Australia, the Middle East and
Africa.
e5 Solutions Group Profile
Introductions
Our Mission: Saving people money so
they can live better
Company Profile
Walmart U.S. Sam’s Club
Walmart
International
• 59% of total sales,
or $275 billion*
• 4,049 stores
• 12% of total sales, or
$56 billion*
• 620 Clubs
• 29% of total sales, or
$135 billion*
• 6,222 stores
* Sales amounts based on fiscal 2013 reported results
$466 billion total sales
2.2 million associates
10,891 stores/clubs
27 countries
8
Over 7,000 global
bank accounts
Operate in 27
countries
Partner with 36
global banks
Manage ~ 15
currencies
Process $ Billons
of cash per day
Canada
Japan China
India
United States
Mexico
Central America
United Kingdom
Argentina
Brazil
Africa
Chile
~$50B Total debt
$18B Credit
facility
Scope of Global Treasury – Worldwide
Banking Solutions Support our Global
Business
Global Treasury Banking Solutions
Global & Regional Support
We partner with banks to support global business needs
Cash Management
Retail Industry Products
Credit Facilities and
Debt Issuance
Stock Repurchase &
Dividends
Decision Support
9
Investments Trade Financing
Derivative Execution
10
Corporate
Bank
Account
Transporting
cash to/from
stores
Banking Starts with Our Core Business
Deposit Store Cash
EBT Credit & Debit Checks
Counterparty Selection: Three Key Criteria
Ability to meet global and/or
regional needs
Product offerings that
satisfy our business needs
Financial Strength and
Stability
11
12
12 12 12
Monitoring Strength and Stability of Counterparty to Effectively Balance Risk
ST / LT Credit
Ratings
5yr CDS Spread*
Total
Assets
Qualitative Factors
*CDS Spread: Credit Default Swap rate over the treasury rate
Total Scores
Tier 1 Tier 2 Tier 3 Tier 4
Rankings
Measurements
Managing Counterparty Exposure
Measuring Counterparty Exposure
Investments Derivatives
Cash in
Bank
Cash in
Transit
Commodity trading Interest & Currency Swaps
Cash in bank Cash in transit
How We Used Technology in the Past
Central Treasury
Personnel
Emails
Paper Files External Reports
Spreadsheets
Global Reports
How We Use Technology Now
Treasury Workstation & BI Reporting
Bank Administration
Swift Service Bureau
2013: Wave 1 of global treasury
workstation implemented
Global
Treasury
Platform
Treasury
Data from
operational
systems
Bank
data
Corporate Headquarters – Treasury
IHC LP CM
Subsidiary 1
In-House Cash
Cash Management
Transaction Manager
Money
Market Securities Foreign
Exchange Derivatives
Liquidity Planner
IHC LP CM
Subsidiary 2
IHC LP CM
Subsidiary 3
Information Systems
Financial Accounting
Financial Markets
Banks
Analyzers
Credit
Risk Market
Risk
BCM
Debt Commodities
Treasury: Transaction Manager
Debt & Investments Hedging
Money
Market
Securities
Foreign
Exchange
Derivatives
Contract Management
Front Office
Back Office
Accounting
Debt
Commodities
Cash Position Liquidity Forecast
Bank
accounts
Balances
Cash in
transit
Investments,
Debt & Hedging
Operations
Trading
Liquidity Management
Market information
Managing external cash balances and obligations
Multi-Bank simplification and standardization
Drill down functionality
Cash Management
Treasury: Transaction Reporting
Treasury: Transaction Reporting
Treasury: Transaction Reporting
Treasury: Market Risk Analyzer
Features
Control credit risks and
settlement risks
Company-wide limits
Online transaction credit check
Flexible limit creation &
exposure calculation
Exposure
8.5
632.3
728.7
12.3
Limit
10.5
700.7
716.7
4.8
Partner
Euro Bank
NorthAm Bank
Asia Bank
SouthAm Bank
Credit Exposure
In %
19.5%
9.3%
-1.7%
-178%
Free
2.0
68.4
-12.0
-7.5
Credit Risk
Analyzer
Close transaction,
update limits OK Limit-
Check
Transaction Manager
Treasury: Credit Risk Analyzer
Europe
Treasury
Center
Latin America
Treasury
Center
Asia Pacific
Treasury
Center
North America
Treasury
Center
Contact
Mgmt
Bank
Account
Mgmt
(Open/Update
/Close)
eBAM
Document
Mgmt
(Letters, Forms)
Legal
Entities
& G/L
Accounts
Mgmt
Disaster Recovery,
Business Continuity
Planning
Authority
Mgmt
(Signers, D&O,
Execution,
Disbursement)
Bank
Resolution
Repository
Mgmt
Financial
Institutions
Mgmt
(Type, Ratings,
Services, Fees)
Banking Relationship
Metrics/Reporting:
Magnitude, Scope, Leverage
Enhanced Controls:
Authorities,
Service Fees,
Fraud Mitigation
Bank Relationship & Bank Administration Management and Controls Bank Account Administration & Authorities
Bank Relationship Management
Banking Structure & Fees
ROW
Treasury
Center
Bank Administration & Relationship Mgmt.
Questions