Treasury with a mission i cu 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

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blad 'What's news' (EN) | 1996 | | pagina 9