Le magazine du trésorier - n°71 - 3ème trimestre 2010 - (Page 10)

The Bank Balance Score Card or How to Rate your Banks Treasurers often do not bother to quantify or qualify their bank relationships. One solution, the “Bank Balance Score Card” (BBSC), involves issuing a regular, formal report listing the status and level of one’s bank relationships, in the form of a rating assigned to each one, based on the type and quality of that relationship. This type of report provides a summary tool that can be used to adopt and consistently apply an appropriate strategy for managing relations with the group’s banking institutions. Bank relationship management is certainly one of the most important issues to return to the limelight since the onset of the financial crisis. It will be essential to foster loyalty in these relationships in order to weather the storm and the liquidity crisis in these times of economic difficulty. FOCUS QUANTIFY AND QUALIFY YOUR BANK RELATIONSHIPS The idea may seem odd or like a waste of time, yet since the beginning of the financial crisis and its disastrous consequences on the liquidity offered by the markets and banks, maintaining the quality of one’s bank relationships has become an essential task for many treasurers. Bank relationships must be maintained, and fostering a good relationship takes effort. There is work to be done on both sides (both for the bank and the treasurer). However, the treasurer must know how and be able to judge and categorise these relationships as objectively as possible. In practice, this is no easy task. Such a tool, when implemented and regularly updated, becomes a useful instrument for managing bank relationships and offers a way to provide relevant reporting to the upper management. This information is often also part of treasury reports and KPIs. Generally, CFOs consider the successful management of bank relationships and the proper distribution of business among banks to be key objectives for their treasurers. All banks are not created equal. Not all banks are global or as stable and reliable as they many seem. The financial crisis has been a stark reminder of this sad fact. The relationship cannot be addressed in a decentralised, uncoordinated manner, as the “side business” portion has become significant for banks and the “pie” they must share is getting smaller and smaller. Consequently it is now even more important to allocate your business to each bank in proportion to its particular merits and efforts. HOW TO MAP ONE’S BANK RELATIONSHIPS Ten-Step Approach to the “Bank Relationship Balance Score Card” 1. Map the banking groups with which you work throughout the world to create a “family portrait” that is as complete as possible. There should be different tiers (one, two or even three tiers, as your company does not have the same level relationship with every bank). 2. Combine the banks into groups (e.g. Soc Gén – Geniki – Splitska Banca belong to the same group, SG / TEB are in another, and BGL / BNPP are in yet another). 3. Add up all the credit lines, separating “committed” lines from “uncommitted” lines. 4. List the types of criteria used to assign a “score” (e.g. price; effi- 10

Table des matières de la publication Le magazine du trésorier - n°71 - 3ème trimestre 2010

Couverture
Sommaire
EDITORIAL
- Euro en crise ou maladie de jeunesse ?
FINANCIAL HIGHLIGHTS
INTERVIEW
- M. Marco Pescarolo, Trésorier du Groupe Ferrero Bekkari
FOCUS
- The Bank Balance Score Card or How to Rate your Banks
- Performances relatives ou absolues
- Don't waste a good crisis
- L'évolution de la fonction fiscale
FORUM OF ADVERTISERS
- Après la réduction des coûts, l'optimisation des revenus
- La démarche « Creditoring »
- 15 minutes with… Hamburg-Mannheimer
TREASURERS' ASSOCIATIONS
- Green Finance : Rethinking Finance, introducing the carbon neutral CFO
NEWS

Le magazine du trésorier - n°71 - 3ème trimestre 2010

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