Corporate and Investment Banking. Cash Management across Africa

Corporate and Investment Banking Cash Management across Africa

Cash Management Standard Bank your cash management partner in, for and across Africa Notes Disclaimer This document has been prepared solely for information purposes by The Standard Bank of South Africa Limited, acting through its Corporate and Investment Banking Division ( SBSA ). Any indicative terms provided to you are provided for your information and do not constitute an offer, a solicitation of an offer, invitation to acquire any security or to enter into any agreement, or any advice or recommendation to conclude any transaction (whether on the indicative terms or otherwise). Any information, indicative price quotations, disclosure materials or analyses provided to you have been prepared on assumptions and parameters that reflect good faith determinations by us or that have been expressly specified by you and do not constitute advice by us and it should not be relied upon as such. The information, assumptions and parameters used are not the only ones that might reasonably have been selected and therefore no guarantee is given as to the accuracy, completeness, or reasonableness of any such information, quotations, disclosure or analyses. No representation or warranty is made that any indicative performance or return indicated will be achieved in the future. This document is not an official confirmation of terms, and any transaction that may be concluded pursuant to this document shall be in terms of and confirmed by the signing of appropriate documentation, on terms to be agreed between the parties. The information in the document is also subject to change without notice. SBSA, or an associated company, may have effected or may effect transactions for its own account in any investment outlined in the document or any investment related to such an investment. Prospective investors should obtain independent advice in respect of any product detailed in this document, as SBSA provides no investment, tax or legal advice and makes no representation or warranty about the suitability of a product for a particular client or circumstance. Transactions described in this material may give rise to substantial risk and are not suitable for all investors. SBSA will only provide investment advice if specifically agreed to by SBSA in appropriate documentation, signed by SBSA. This information is to be used at your own risks, and SBSA makes no representation with regards to the correctness of the information herein. Neil Surgey Standard Bank has been ranked as the Best Bank in Africa by Global Finance magazine in 2014. We were also ranked as the best bank for payments, collections and liquidity management in Africa and best overall bank for cash management in Africa, alongside a number of country awards. As Africa emerges onto the global economic stage, and trade activity into, across and out of the continent increases, Standard Bank stands as a trusted financial services partner to many organisations working across the continent. Our clients are involved across the spectrum of sectors relevant to Africa, from mining and metals, oil and gas, telecommunications and media, financial institutions, and power and infrastructure to agriculture, healthcare and pharmaceuticals, and retail. It is indeed exciting times for Africa. This is not just in terms of escalating trade and foreign direct investment, increasing political stability and harmonisation of regulations, but in the growth we are seeing in our clients businesses. We are fully committed to supporting development across Africa by providing leading financial services. We have full banking operations in 20 African countries, providing comprehensive solutions across transactional banking, investment and lending services to a wide range of clients, including multinationals, governments, corporations, small businesses and individuals. We also have a presence in two additional countries on the continent, extending coverage for local and international business. Our teams are based in key financial markets in developed and emerging economies, including London, New York, Hong Kong and Beijing, putting us close to international decision-makers. Our clients benefit from our knowledge of and expertise in emerging markets, coupled with our global outlook. We continue to invest in growing our banking footprint and improving our technology and systems. With Africa open for business, organisations benefit from working with a bank that understands and manages the opportunities and challenges across the continent, considering Africa s diversity across cultures, regulations and market realities. Standard Bank s long history of success in Africa stands testament to our ability to meet the needs of our local and multinational clients, by applying the local knowledge of our on-the-ground teams to meet our clients unique needs within the ambit of local realities. We help you realise value in African opportunities. Standard Bank is an African bank with global reach. As the bank in, for and across Africa, we connect Africa to the world and the world to Africa. Neil Surgey, Head: Transactional Products and Services 18 Authorised financial services and registered credit provider (NCRCP15) The Standard Bank of South Africa Limited (Registered Bank) Reg. No. 1962/000738/06 SBSA 187207-8/14 3

A selection of key awards and accolades 2014 2013 Global Finance World s Best Treasury and Cash Management Providers The Banker Top 500 Bank Brand Best Overall Bank for Cash Management in Africa Best Bank for Liquidity Management in Africa Best Provider of Money Market Funds in Africa Best Bank for Payments and Collections in Africa emeafinance Treasury Service Global Finance Best Trade Finance Bank in Africa and South Africa emeafinance African Banking Global Finance World s Best Investment Banks Best in Frontier Markets (Global) Best Investment Bank in Africa Global Finance World s Best Emerging Markets Banks Global Finance World s Best FX Providers Best Sub-Custodian Bank in Africa Risk Awards Euromoney Annual Africa Research Poll Best Bank in Africa Global Finance World s Best Sub-Custodian Banks Euromoney Awards of Excellence GTR Africa Leaders in Trade Awards Global Emerging Markets Dealer of the Year Risk SA Trade Finance Awards for Excellence Treasury Management International 2013 For more information on Standard Bank, including our credit ratings, annual reports and shareholders, visit http://reporting.standardbank.com 17

Cash Management While a large part of trading activity occurs via the Africa, Asia and Europe trade corridors, we are starting to see growing levels of intra-africa trade. This new trend is largely being driven by rapid urbanisation, a younger and growing middle class and the rise of the consumer class. Cheaper and improved telecommunications networks in these countries are also ensuring that customers and financial institutions are imbedded in the payments system. Standard Bank will ensure that its expertise, systems and people are there to support growth in Africa by facilitating trade and supporting individual businesses on the continent. Why choose Standard Bank Our business is structured around your needs. Our relationship managers provide one point of contact for all your financial needs. They develop an in-depth understanding of your business and aspirations as they evolve, and link you to the full capabilities of Standard Bank. They work closely with specialist product and global distribution teams that develop and deliver alwaysappropriate solutions that move you forward. We have specialist expertise in industry sectors most relevant to Africa and other emerging markets, with almost 150 years experience in natural resources. Our sector specialists are on hand to provide deep insight into the commercial, regulatory and operational realities in strategically important, high-growth markets. Through our African presence and emerging markets focus, you can access markets and opportunities not available through other sources. We service your full financial and banking requirements, from transactional banking, saving and borrowing to investment management, life insurance, risk management and advisory. Leveraging our universal banking capability, we also provide comprehensive financial services to your stakeholders, including staff, distributors, suppliers and shareholders. Supporting development across Africa Standard Bank facilitates and finances opportunities that drive economic development and social transformation across Africa. We partner with our clients and stakeholders to facilitate increasing trade and investment flows across Africa, so supporting economic growth and job creation. While Africa has vast reserves of natural resources, it is diversifying into other sectors, including services, technology, manufacturing and retail. Demographic projections are also encouraging with a working population of 1.1 billion by 2040, urbanisation that will see half of all Africans living in cities by 2020, and consumer spending reaching around USD1.4 trillion in 2020. These trends point to a massive potential market. The case for investing in Africa Growth in many markets across Africa continues to present opportunities to investors and businesses, with growth outpacing advanced economies and many emerging market peers. Also, African markets have historically shown a lower correlation with emerging and developed markets, with lower volatility and higher returns. Foreign direct investment (FDI) inflows into Africa are also on the rise, particularly from China and India. The International Monetary Fund predicts that annual growth in Africa will be around 6% in 2014 and in 2015, while four of The Economist Intelligence Unit s top-ten forecasted growth countries over the next few years are also African. The European Union s trade with Africa was more than USD300 billion in 2012, making it one of the continent s largest trading partners. However, the BRICS countries Brazil, Russia, India, China and South Africa are leading the way, with China s business alone worth around USD200 billion that year. While demand for raw materials from emerging economies, especially China, is supporting growth, increasing trade within Africa itself is also having a positive impact. Exports by African countries to their peers have surged by 32% since the 2008 economic downturn, thanks in part to the growth of a burgeoning middle class. We also play a positive role at national and regional level by facilitating relationships between the public and private sectors, and in providing services, capital and guidance to governments. 16 5

Foreign Exchange Standard Bank Transactional Products and Services making business in Africa work for you Through Standard Bank, you have access to world-class, standardised and centralised cash management solutions throughout the sub-saharan African region. We have a proven ability to provide world-class cash and liquidity management services. Our solutions adhere to best practice project planning, accuracy and precision to enhance value for you. This is underpinned by innovation and appropriate use of technology that provides a seamless interface with your business. Relationships are key to banking and business in Africa. We endeavour to become a trusted partner to clients and stakeholders. And key to building and maintaining your trust is in understanding the fundamentals of your business and providing dependable and efficient cash management solutions. At Standard Bank, we focus on performance and delivery, leveraging our physical presence in multiple locations in each country and our in-depth understanding of exchange control regulations, automated clearing and degrees of straightthrough processing for each area. We work closely with you to navigate the complexities of managing your working capital across Africa. Our solutions help you align your operations to local requirements, streamline business processes, reduce operational costs and financial systems risks, and improve supply chain management. As a truly African bank, we have the legitimacy and relationships on the continent to open opportunities for your business. Hasan Khan, Head of Sales: Transactional Products and Services, and Head: Transactional Products and Services Africa Experts in helping you manage your working capital Every business needs sufficient funds available through its operating cycle and to cover day-to-day operational activities. Timing of receivables and payables is critical for the financial wellbeing of a company. Due to the level of open account trading that takes place on the continent, effective cash management is vital to business success. Given this, businesses must also ensure that cash resources are utilised effectively and efficiently, to maximise the bottom line. Working capital constitutes a large portion of a company s assets and is crucial for meeting short-term obligations. Factors such as reducing the number of days for account receivables and inventories, efficient collections in underserviced areas and reducing the cost of collections are priorities in optimising cash conversion. Also, with current constraints on cash and credit and with higher borrowing costs, maintaining higher levels of working capital to support growth and the associated rise in cost of production is a key consideration for company treasuries. Standard Bank works with clients to help them manage their financial supply chain, by facilitating the collection of funds from beneficiaries, managing and optimising funds, and facilitating payment to creditors in multiple currencies and countries in Africa. We help you maintain visibility of your activities and funds as they move through each stage of the cash conversion cycle. Cash conversion cycle Goods/services produced Leading capability in foreign exchange in Africa With trade and investment flows increasing in Africa, clients require a robust and reliable foreign exchange (FX) platform, backed by an experienced team who understands the environment in each country across the region. Expert guidance on limiting exposure to currency exchange fluctuations, understanding exchange control regulations and minimising the risks associated with cross-border transactions is crucial to building a business in Africa. Our full suite of products include both standardised and customised solutions to meet your needs, locally and cross border. Advanced technology applications enable you to electronically execute foreign exchange transactions and operate best practice international cash management systems online. We deliver a 24-hour foreign exchange service sensitive to regulatory and risk factors in emerging markets globally. Trade and payment solutions using renminbi Ties between China and Africa continue to deepen, substantially changing Africa s political and economic environment. This is seen in the increase in trade and payment volumes between Africa and China. Standard Bank has the capability to support your requirements in trading and bridging the gap with China using the renminbi (RMB). With RMB now acceptable as a currency of global trade, Standard Bank provides payment clearing and trade settlements through a centralised solution designed to meet your requirements. Our growing suite of RMB solutions is supporting financial institutions, African and Chinese importers and exporters, and global investors. Payment to suppliers, employees (account payable) Goods/ services sold (accounts receivables) Standard Bank has the most comprehensive FX network in sub-saharan Africa, and our flow business is the leading market maker in South Africa and Nigeria, the two largest markets in this region. We process 30% of Africa s FX volumes, including South Africa. Cash in 6 15

Online Banking Services Cash Management Comprehensive transactional options for your business new Business Online for secure, convenient banking wherever you are Transactional requirements depend on the unique needs of clients in different sectors and regions, influenced by various regulatory regimes and local infrastructure. In a world where technology is constantly evolving, balancing innovation and stability is crucial to the continuity of your business. Standard Bank provides a comprehensive range of access points to meet various transactional banking requirements. We have a growing footprint of over 1 280 branches and 7 860 ATMs and ANAs, and established partnerships with providers in cash in transit. We also offer a market leading online banking platform. Our advanced electronic platform offers secure, reliable online banking services tailored to meet the needs of our corporate and institutional clients. new Business Online provides a single view of your relationship with Standard Bank across products, currencies and countries in near real-time. Connecting Africa to the world and the world to Africa Standard Bank s cash management solutions provide you with the tools to administer your business accounts reliably, cost effectively and with confidence. We offer a number of local and regional solutions to ensure you have end-to-end control and visibility of your cash. We provide a consolidated view of your cash position across a range of currencies, including US dollars, pound sterling, euro, the South African rand and other local currencies. You can also fund or defund country accounts as required to accommodate cross-border cash needs, subject to domestic regulations. We leverage our extensive African footprint and understanding of the banking landscape to guide you on cross-border account selection and the rules and conditions that apply when operating foreign bank accounts. Advanced encryption technology ensures complete safety for all transactions, while varying levels of security clearance can be issued to monitor staff access. Our sophisticated range of cash management services puts you in control of your funds at all times. This includes numerous payment and collection options, and a wide range of secure reports to help monitor and manage day-to-day cash flow in real time. Our liquidity management services help you to make optimal use of your cash, ensuring expenses are covered, overdrafts are kept to a minimum, and any surplus cash is earning the best interest possible. From managing day-to-day transactions, payments and transfers to viewing statements and self-service administration, new Business Online is a convenient, cost-effective way to access your business 24 hours a day, 7 days a week from anywhere in the world. Drawing on Standard Bank s understanding of emerging markets, our specialist product expertise and established local networks, new Business Online opens up unique global market advantages for corporate and business banking clients around the world. We have a presence in 20 countries on the African continent, including South Africa, Kenya, Nigeria, Angola and Mozambique. We also have presence in key emerging and developed markets and major global financial centres. Countries where Standard Bank is present in. 14 Providing working cash management solutions across Africa Also, despite developments in technology spurring on migration to electronic payment and collection systems, many countries in Africa are still predominately cash-based. Grassroots payment and collection services (such as on cash and cheques) remain popular. Standard Bank offers products and services that work within these constraints, including comprehensive reports that are available when you need to track and identify payments and receipts. 7

Liquidity Management Optimising liquidity management in your business Effective liquidity management in a business ensures that there is sufficient visibility and control over cash flows, both centrally and across borders. It is vital if a business is to achieve optimal profitability from under-utilised funds. Within the ambit of local regulations and allowing for complexities in each market, Standard Bank offers a range of products to our local and multinational clients to manage balances. Where regulations allow, balances can be netted, pooled or swept to provide you with an overall group position for participating accounts. Near real-time balance and statement information is provided to help you optimise liquidity structures, by either investing or borrowing funds to meet your obligations. Accounts are available in multiple currencies, also servicing the requirements of clients who are not domiciled in respective countries, according to individual country regulations. You can view account positions through balances and statements on demand through our electronic banking platform. We also provide a range of messaging options to notify you of transactions and give you access to comprehensive transaction histories to keep your finger on the pulse of your business. 15 We provide you with unique and structured solutions to assist you in managing liquidity. However, as solutions become more complex and multiple countries become involved, legal requirements can become onerous. We work closely with you to provide the best solutions within the framework of local and international regulations. Our understanding of the financial landscape across Africa and our tested and reliable infrastructure ensures that balances are visible and managed to achieve the greatest level of profitability. Our transactional bankers provide expert guidance on services, including: Notional pooling and sweeping products A consolidated view of cash positions across Africa via our electronic banking platform, including the ability to fund or de-fund countries An exchange control advisory service to assist with cross-border liquidity management services Advice on optimising liquidity through regional processing hubs. 13

Cash Management Regional reach to streamline your business Managing financial and regulatory risks so you can focus on your business As the bank for Africa, Standard Bank is a leading proponent in efforts to regionalise financial services and are at the forefront of leveraging emerging technology to do this. We are the only bank with on-the-ground access to key regional hubs in Africa. Standard Bank is part of two regional payment systems, the East African Community (EAC) and Southern African Development Community (SADC), through which we facilitate intra-day urgent payments to participating countries. With over 150 years of experience in Africa, Standard Bank understands the regulatory and legislative environments in which we operate. We provide ongoing support to help you navigate varying and complex regulations in different countries and regions. We have long-established networks to drive efficiencies in the pan-african cash management space. As a result, we support centralised or decentralised processing models for multinational clients as they access multiple countries across Africa. Our extensive footprint in Africa across our physical and network infrastructure gives you access to a local interface with insight into local systems and businesses. With an understanding of factors from infrastructure constraints and the maturity of local financial systems, to local laws and reporting requirements, we provide the local support and trusted guidance that you need. Standard Bank is a market leader in electronic payments and collections in our markets. To improve efficiency and deliver excellent products and service to our clients, we continue to invest substantially in our technology systems and infrastructure across Africa. 17 Our support extends to effectively managing a host of risks from guiding you on the risks associated with compliance, tax and fraud, to interest rate and foreign exchange risks. This is enhanced by our local teams who provide specific local expertise. As a well-recognised and respected brand across the continent, we provide local credibility and connect you to local networks, vital to help you navigate the complexities of each market. Standard Bank is the financial services partner to provide a consistent and considered approach to help your business succeed. Building relationships that build businesses Our business is structured around the needs of clients, with dedicated relationship managers providing a single point of contact to Standard Bank s full range of financial products and services. Each country also has a relationship manager to coordinate in-country needs, as well as a dedicated transactional banker to manage day-to-day banking services. Our partnership approach is based on the understanding that your business evolves over time. We have the flexibility to respond to emergent technology requirements that help you lead and innovate in your sector. Our relationship team is supported by researchers, product and global distribution specialists who provide the operational support, insight and personal service you need to make the most of your business in Africa every day. 9

Account Services Payments and Collections Expert account management as a foundation for your business in Africa Account management forms the base for all banking services. We are a trusted advisor to local and multinational clients, helping them view and track capital outflows, reduce trapped cash and administer their businesses centrally. Our experienced account specialists help you open and administer accounts, and connect you to the full capabilities of Standard Bank. Resident and non-resident accounts are available in the major African and international currencies in line with local regulations, with the ability to add additional currencies if required. Account types to suit your business requirements We have a range of account types to suit your company s requirements, across: Transactional accounts Investment accounts Our current account provides you with immediate access to funds and full electronic access for viewing and transacting so that you can easily manage your funds. Statements are available daily, weekly or monthly. Secure investment accounts with guaranteed principle. A note on mobile money in Africa More than 50% of global mobile money deployments are taking place in Africa, which makes it a sector where the continent is leading the rest of the world. Standard Bank has seen the number of payments to mobile wallets in Kenya on behalf of its clients increase by 300% in 2013. In Nigeria, Standard Bank has started a mobile payments pilot project, putting it at the forefront of the country s central bank policy of promoting a cashless society. Nigeria s sheer scale and the early adoption of the systems in Kenya means that both countries are well placed to leverage this growth potential and the associated benefits. Multinational corporations operating in Africa are increasingly looking at ways to eliminate the risk of carrying and transporting cash and the use of mobile wallets to facilitate cashless payments is a cost-effective and efficient way of doing this. Mobile payments are becoming a valid substitute for carrying cash in many parts of Africa. It is an easy and safe way to ensure that funds reach their intended recipients, making it an ideal solution for companies that have large workforces requiring weekly or monthly wage and salary payments. Standard Bank is helping to facilitate the adoption of mobile payment technology by establishing partnerships with telecommunications companies and businesses across the continent. Loan accounts Call account You earn low-tier interest with immediate access to your funds. We provide monthly statements and full electronic access for you to have a constant view of your funds. Notice deposits You earn mid-tier interest and give notice before your funds become available. Monthly statements are provided. Fixed deposits A set tenor gives you the opportunity to realise high-interest yield on your funds. Monthly statements are provided. Overdrafts This gives you access to additional funds for working capital through a monthly facility that rolls over from month to month. Interest is charged on the overdraft balance and detailed in statements. Term loans If you need funds for a specific time, we provide a set loan that you can draw at a specific time and repay over a defined period. Interest is charged on the loan amount and detailed in statements. Processing your payments accurately and on time Standard Bank s range of payments products help local and multinational clients transfer funds to their creditors and staff, locally or across borders. Our understanding of the payment landscape across Africa and our tested and reliable payment infrastructure ensure that payment instructions are processed accurately and on time. Payments can be made electronically via a range of secure data transfer channels, including telegraphic transfers, domestic electronic funds transfers and real-time gross settlements, or physically by means of cash or cheques. We also offer card solutions in some markets. Using our electronic payment solutions, you can: Initiate payments anywhere, anytime, across the globe Make single or bulk payments, for same day or future value Make local or foreign currency payments from a single point of origin Transfer funds easily between Standard Bank accounts across your global banking portfolio (country regulations permitting) Generate comprehensive reports Advise beneficiaries when payments have been made. As an additional service, Standard Bank is able to issue payment guarantees to your creditors when required. Reliable and comprehensive collections capability Standard Bank s range of collections products help local and multinational clients receive funds from their customers locally or across borders, optimising working capital. Our understanding of the collections landscape across Africa and our tested and reliable collections infrastructure ensures that value is passed to your accounts quickly and securely, with sufficient information for you to identify the source of any funds. Our services are augmented by Standard Bank s universal banking offering, specifically in personal and business banking where we service the needs of local clients in 20 countries across Africa. Collections can be effected electronically, through electronic receipts or direct debits, or physically by means of cash, cheque or card. 10 11