BankingCapital MarketsCOVID-19
March 24, 2020

Little or No Pushback Has Corporates Drawing on Credit Lines—At What Cost?

Founder’s Edition by Joseph Neu Insights on the reasons to tap revolvers and what the trend may mean for banks and treasury. One clear insight emerging during our first several NeuGroup virtual meetings as the COVID-19 crisis escalates is that corporates are taking a slew of steps to bolster their liquidity positions. Among the most notable: All but the most stellar credits are drawing on revolving credit facilities (RCFs), a move that has potentially profound implications for banks. As Reuters…
BankingCapital MarketsCOVID-19Treasury Management
March 19, 2020

Communication Is Key When Drawing on a Revolver

Get buy-in from internal and external stakeholders as you guard against a COVID-19 liquidity crunch. Every day seems to bring news of another multinational corporation drawing down some or all of a revolving credit facility to weather potential liquidity disruptions created by market reaction to the coronavirus outbreak. News reports say private equity firms like Blackstone are encouraging portfolio companies to tap credit lines. The companies recently tapping revolvers include Kraft Heinz, L Brands and Carnival. NeuGroup Insights reached out…
BankingCapital Markets
March 17, 2020

Not All Bank Fees Are Created Equal

In good times and bad, treasury teams benefit from knowing how their banks look at the world. That's one reason this chart, created by NeuGroup's Scott Flieger, is compelling. It shows which products are especially important to banks by measuring both their relative profitability and how much balance sheet impact they have. A third dimension shows which products result in predictable revenue and which are more episodic in nature. Most members found the slide "directionally accurate" and helpful in explaining why…
BankingCash & Working CapitalNGI
February 27, 2020

A Treasurer Grows Frustrated with a Top US Lender and Takes It down a Notch

Seeking a bigger return on its capital as rules tighten, the bank wanted a larger share of wallet. One of the largest US commercial lenders is aggressively seeking more return—share of wallet—for the credit it provides corporates, prompting at least one borrower to say “enough” and downgrade the bank’s rank in its loan syndicate. That takeaway emerged at a recent NeuGroup meeting where members exchanged insights about syndicated loan market trends and discussed which banks are eager to extend credit…
BankingCash & Working CapitalTechnology
February 13, 2020

Making Bank on Receivables

Founder’s Edition by Joseph Neu Investor demand for receivables-backed securities presents opportunities for banks that harness data, technology. Last week, I noted how supply chain finance (reverse factoring et al) was raising concerns with accountants, rating agencies and regulators because it allows unscrupulous firms to potentially extend payables to fund their working capital without considering it to be debt. This week I focus on the positive sides of trade finance and, especially, supply chain finance: Thinking about receivables plus data…
BankingTechnologyUncategorized
December 10, 2019

Back to the Future: Making Banks a Source for Innovative Solutions Again

Founder’s Edition, by Joseph Neu Working to reverse the notion that banks are no longer a source for innovative solutions. One of the trends we’ve seen in interacting with NeuGroup members recently is their concern that banks are no longer the source for innovation or solutions that tap the most innovative technology and digital thinking. And banks seem to be hearing this message, prompting them to respond to counter that perception. Unfortunately, some banks find it easier to respond with…
Banking
October 17, 2019

Another Reason to Keep on Top of Bank Fees

Only treasury is positioned to fully evaluate bank fees, so ensure your team does not provide reasons for other groups like procurement to intervene. As organizations look to reduce spending on vendors and drive organizational savings, it is critical that treasury provide proper bank fee analysis to prevent other internal functions from viewing bank spend as a lever to hit savings goals. That key takeaway emerged at a recent NeuGroup meeting of cash managers. One NeuGroup member present said he’s…
BankingInsights NewsletterUncategorized
October 9, 2019

CECL to Reshape Credit Products

As new rules on how banks account for credit losses approach at the start of next year, corporate borrowers may want to start asking their lenders how their loans and other credits may be affected. The Financial Accounting Standards Board’s Current Expected Credit Loss (CECL) standard, which becomes effective Jan. 1, requires banks to recognize on day one the losses expected over the life of their credit products. Several banks, including JPMorgan Chase, Citigroup, Discover Bank and Synchrony Financial have…
BankingCompliance
May 2, 2019

Bloomberg Exits KYC and the Market Moves On

Bloomberg Entity Exchange is closing up shop soon, but there are plenty of players out there. Bloomberg confirmed in early April that it plans to shut down Entity Exchange, a know-your-customer (KYC) solution that was supported by Citibank and adopted by multinational corporations including Coca-Cola. Industry insiders say an internal management change led to a review of Bloomberg's product portfolio, with Entity Exchange and the company's sell-side execution and order management solutions businesses getting cut. Bloomberg, they say, was looking…