Best Practices in Global Bank Risk and Relationship Management:

Transcription

1 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

2 Agenda 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

3 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

4 e5 Solutions Group Profile 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.

5 Introductions

6 Our Mission: Saving people money so they can live better

7 Company Profile $466 billion total sales 2.2 million associates 10,891 stores/clubs 27 countries 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

8 Scope of Global Treasury Worldwide Over 7,000 global bank accounts Partner with 36 global banks Process $ Billons of cash per day ~$50B Total debt Canada United Kingdom United States China Japan Mexico Central America India $18B Credit facility Manage ~ 15 currencies Brazil Africa Chile Argentina Operate in 27 countries 8

9 Banking Solutions Support our Global Business Investments Credit Facilities and Debt Issuance Trade Financing Global & Regional Support Cash Management Retail Industry Products Global Treasury Banking Solutions Derivative Execution Stock Repurchase & Dividends Decision Support We partner with banks to support global business needs 9

10 Banking Starts with Our Core Business Deposit Store Cash Transporting cash to/from stores Corporate Bank Account EBT Credit & Debit Checks 10

11 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 Managing Counterparty Exposure Monitoring Strength and Stability of Counterparty to Effectively Balance Risk ST / LT Credit Ratings 5yr CDS Spread* Total Assets Qualitative Factors Measurements Total Scores Rankings Tier 1 Tier 2 Tier 3 Tier 4 *CDS Spread: Credit Default Swap rate over the treasury rate 12

13 Measuring Counterparty Exposure Cash in Bank Cash in Transit Cash in bank Cash in transit Derivatives Investments Commodity trading Interest & Currency Swaps

14 How We Used Technology in the Past s Spreadsheets Central Treasury Personnel Global Reports Paper Files External Reports

15 How We Use Technology Now 2013: Wave 1 of global treasury workstation implemented Treasury Workstation & BI Reporting Bank Administration Global Treasury Platform Swift Service Bureau

16 Treasury Corporate Headquarters Treasury Credit Risk Analyzers Market Risk Financial Markets Transaction Manager Information Systems Money Market Debt Securities Foreign Exchange Derivatives Commodities BCM Banks In-House Cash Cash Management Liquidity Planner Financial Accounting IHC CM LP IHC CM LP IHC CM LP Subsidiary 1 Data from operational systems Subsidiary 2 Bank data Subsidiary 3

17 Treasury: Transaction Manager Debt & Investments Hedging Money Market Debt Securities Foreign Exchange Derivatives Commodities Contract Management Front Office Back Office Accounting

18 Cash Management Market information Liquidity Management Trading Cash Position Liquidity Forecast Bank accounts Balances Cash in transit Investments, Debt & Hedging Operations Managing external cash balances and obligations Multi-Bank simplification and standardization Drill down functionality

19 Treasury: Transaction Reporting

20 Treasury: Transaction Reporting

21 Treasury: Transaction Reporting

22 Treasury: Market Risk Analyzer

23 Treasury: Credit Risk Analyzer Transaction Manager Features Limit- Check OK Close transaction, update limits Control credit risks and settlement risks Company-wide limits Online transaction credit check Flexible limit creation & exposure calculation Credit Risk Analyzer Credit Exposure Partner Exposure Limit Free In % Euro Bank % NorthAm Bank % Asia Bank % SouthAm Bank %

24 Bank Administration & Relationship Mgmt. Bank Relationship & Bank Administration Management and Controls Bank Account Administration & Authorities Bank Relationship Management Banking Structure & Fees North America Treasury Center Europe Treasury Center Latin America Treasury Center Asia Pacific Treasury Center ROW Treasury Center Bank Account Mgmt (Open/Update /Close) ebam Authority Mgmt (Signers, D&O, Execution, Disbursement) Document Mgmt (Letters, Forms) Financial Institutions Mgmt (Type, Ratings, Services, Fees) Contact Mgmt Legal Entities & G/L Accounts Mgmt Bank Resolution Repository Mgmt Enhanced Controls: Authorities, Service Fees, Fraud Mitigation Banking Relationship Metrics/Reporting: Magnitude, Scope, Leverage Disaster Recovery, Business Continuity Planning

25 Questions