Receivable management

Ireneusz KowalewskiTrade Finance Department Head

tel. 657 7272irenueusz.kowalewski@citigroup.com

Mateusz Niemczyk

Trade Sales Headtel. 657 7051

mateusz.niemczyk@citigroup.com

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Receivable discounting solution

• Single obligor approach

• Full recourse versus non-recourse

• Financial versus non-financial

• Public Sector

Bank’s role in receivable management –1. Receivable discounting Bank’s role in receivable management –1. Receivable discounting

Supplier financing

• Target market

• Advantages for buyer:Payment terms, pricing negotiations, relationship

• Advantages for supplier:Liquidity, no collateral, low costs

Supplier1

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1. Supplier issues the invoices / delivers the goods

2. Byuer accepts the invoices and sends them to the Supplier

3. The Supplier submits the application for receivables discounting together with the invoices and buyer’s acceptance on invoice

4. The Bank credits the Supplier’s account

5. Buyer credits BH account on the invoices due dates

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Buyer

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Receivable discounting –electronic platformReceivable discounting –electronic platform

• Electronic request for discounting

• Web-based reports for all parties

• Settlement and reconciliation on due date

• System security and efficiency

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2. Trade Revolving Loan (Handlowy Kredyt Rewolwingowy)2. Trade Revolving Loan (Handlowy Kredyt Rewolwingowy)

• Working capital revolving loan

• Supported by acknowledged assignment of receivable

• Level of eligible receivables electronically verified – weekly

• Size of revolving line adjusted – weekly

• Payments matched against individual invoices (electronically)

Unique solution on the market – end to end process covered by electronic platform

• Weekly verification of adequacy of collateral and subsequent automatic weekly adjustment of the available line

• Comprehensive Early Warning MIS• Monthly verification of Customer’s debtor

performance• More efficient use of Client’s assets (higher

advance rates as compared to currently offered loans supported by receivables)

• Providing comprehensive information to a customer on payments (matched with individual invoices)

• Enhanced debtor payment discipline through soft collection function provided by the Bank

Limited recourseLimited recourse trade receivables discounting discounting for OECD countries

Eligible: open account trade receivables with payment terms up to 180 days180 days

Program under specific iinsurance nsurance aagreementgreement between KUKE SA and Citibank Handlowy

Citibank Handlowy is the beneficiary of the policy, the eexporter dxporter doeoes not make self-s not make self-insuranceinsurance in KUKE SA

the insurance covers 95%95% of invoice value

the policy covers paymentpayment, political and catastrophic, political and catastrophic risk

Soft-collection and recourse procedure, conducted by Citibank Handlowy and KUKE SA

New product underway: domestic receivables discounting with KUKE SA insurance

3. Limited recourse export receivable financing3. Limited recourse export receivable financing