Treasury with a mission
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BeHIND THE CREDIT LINES
treasury
WHAT'S NewS Issue 2 February 1996
9
At the end of last year, London Branch launched its new
dealing room and doubled its 18 desks to 36.
This major investment is designed to launch treasury head
Mark Blundell and his team towards their overall goal - a
broad family of products, better cliënt service and less
dependence on proprietary trading in the treasury's
earnings. Blundell explains.
Mark Blundell joined the bank
nine months ago with a clear
mandate to upgrade treasury
operations. His first goal was
to put in place a series of
different interest rate and
>:urrency products which could
>e offered to London Branch's
customers. 'By customers we
don't only mean corporates,'
he says. 'We see end-users as
financial institutions, hedge
tunds, investment trusts,
insurance companies. In other
words, a broad class of end-
user institutions. By doing so,
we can take better advantage
of our Triple-A rating than we
did in the past.'
ASSET PACKAGING
According to Blundell, his
team is well on its way to
achieving that first goal. 'We're
currently developing the family
of interest-rate protection
products,' he confirms, 'and
we're also trying to position
ourselves for what we perceive
as the future of capital
markets.' One approach to
positioning the bank is
through asset packaging. 'We
have hired a team who will be
originating medium-term notes
from clients and distributing
them to investors, but also
originating bonds in the
secondary market, packaging
them with the derivative and
selling them to investors.'
CLIENT CALLSTHETUNE
This particular product is very
attractive to the London
treasury because it is investor-
oriented. 'The investor literally
calls the tune,' Blundell says.
'Serving the investor as cliënt is
another of our themes, not least
because there's as much money
on the asset side of the balance
Mark Blundell
sheet as there is on the liability
side. We'11 be going after clients
who manage assets since they
increasingly have risk
management and forex needs.'
FORWARD FOREX
The London treasury has
started trading forward foreign
exchange, also with a view to
offering it to customers. 'In the
past, it was used here to create
cheap funding for ourselves,'
he explains. 'But interest-rate
arbitrage, as it's called, was not
really being offered to clients
as a separate product class.
Now we have two very
competent professionals
involved in forward forex
trading and we're already
winning more business.'
PRODUCT STRATEGY
These and other new activities
are all part of what Blundell
calls London Branch's product
strategy. 'Often,' he says, 'it is
a matter of introducing a
relatively simple additional
product, like forward forex.
But we are also putting in
place different types of
interest-rate caps and
swaptions to help clients
manage interest-rate and
exchange risks. On the other
hand, we do nothing in forex
options because Utrecht has
made a very extensive
commitment there. What
we've done is install a broker
line, or ring-down line, to the
options desk in head office
from our treasury marketing
desk. If we need a price, we
just hit the button.'
ACTING FOR THE
NETWORK
Blundell and his team are
clearly focussed on
transforming the London
treasury into a centre of
competence which can take
advantage of The City
environment. 'What we want
to achieve here is the
development of
complementary areas of
expertise. This expertise is
aimed primarily at our
customers here, but we also
work very closely with and for
other offices in the network,
and especially in Europe.'
A whole range of activities is grouped together under the
name Credit Division. Headed by Jim Cunningham and his
deputy Mary Parsons, the 'division' comprises credit analysis,
credit administration and the legal and information centre.
'The Credit Division does not
consider itself to be "back
office",' Cunningham explains,
'because we see ourselves as an
integral part of the whole team
here. We all work so closely
together that a distinction
between front and back offices
would be kind of artificial.
Everybody needs everybody to
do their job. Bank practice
here is that an analysis should
be that, and not just a
repetition of the numbers. I
think the analysis team, lead
by Sue Barrett, does a very
good job there. And I think
they would agree that the hard
part is making every analysis
brief enough, but still
intelligent.'
TREASURY
Eind vorig jaar ging de nieuwe dealingroom van start. Het aantal desks werd verdubbeld van 18 tot 36, zodat voortaan alle treasury
P*: produkten aan de klanten kunnen worden geleverd. Ook de dienstverlening is verbeterd. Hoofd Treasury, Mark Blundell en zijn team
zijn druk bezig het aantal produkten uit te breiden. Naast verschillende rente- en valutaprodukten worden nu ook hedgingprodukten ontwikkeld.
De introductie van asset packaging wordt gezien als middel om zich in de markt te positioneren. Een speciaal team houdt zich bezig met het
opzetten van medium term note programma's voor klanten, en het onder brengen hiervan bij investeerders.
Jim Cunningham