Optimizing Banking Relationships

Treasury must ensure the management of banking relationships, considering several aspects in addition to bank fees. Banking counterparts must be chosen based on the following criteria:

• Geographic coverage of the bank: the bank must be able to support the company in its international activities
• Currencies supported by banks: the bank must be able to handle the currencies in which the company's operational flows are conducted
• Bank fees: Cumulatively, bank fees can result in significant expenses. It is therefore important to constantly monitor these fees and negotiate, when possible (for example, in view of increased transaction volume), a reduction in these fees
• Reputation and credit quality of banks: the company must ensure to limit credit risk by choosing one or more secure banking counterparts. This is assessed based on reputation, credit rating assigned by rating agencies, and Credit Default Swaps (CDS).