Photo of Vincent Couche, Citi, Phillip Bottome, TVS Asianics Supply Chain Solutions, Benny Koh, Deloitte and Mark Troutman, DBS.

Instead of following the best practice of selecting a regional banking partner, TVS Asianics went into this banking selection exercise with a long-term view of selecting the bank(s) that can meet its current business requirements and support its future plans in each country of operations where exposure, diversity and commitment are clearly demonstrated.

Exposure, diversity and commitment clearly visible in this solution

The challenge

After acquiring several businesses, TVS Asianics embarked on a project to improve its banking structure after recognising it currently has more than 20 different banking partners in 15 countries. The management and finance teams have to spend considerable time and resources managing the banks. They were looking to collaborate with banks that understood its business, operate in its countries of operation and, most importantly, partner with banks that will help the company in its journey to become one of the leading logistics operators in Asia.

Bank relations are not as simple as they used to be. Gone are the days when corporates will simply bank with the financial institutions that provide them with credit. With changes in regulation, banks are now more selective of their customers and are more stringent in how they allocate their balance sheet. The ‘one-bank-fits-all’ approach no longer meets all the requirements of a company in every country of its operations.

Banking services are rapidly becoming commoditised and the proliferation of treasury management systems and standardisation in payment formats allows corporates to leverage these technologies to use multiple banks. Bank fees and credit lines are no longer the only factors that corporates consider when selecting their bank(s). Long-term bank relationships are now becoming an increasingly important element for CFOs and treasurers when they select their banks.

The solution

TVS Asianics engaged Deloitte as an independent party to assist in selecting its banking partner(s) for cash and liquidity management. Deloitte reached out to a panel of banks, which included current banking partners and new banks. From this ‘long list’, TVS Asianics shortlisted four banks and finally selected three as its banking partners across it’s 15 countries. DBS is the lead partner bank, with ANZ and Citi supporting the company as well. This is the optimal number of banking partners to meet the requirements of the company. Each bank was chosen due to its strong long-term relationship management, highly developed and connected IT platform, geographical presence, banking operations and services offered in each country.

As Phillip Bottome, CFO explains, “Having three core banking partners instead of one provides a strong flexible long-term solution that allows us access to different opinion and choices, whilst connecting to function in an efficient way. Most importantly, these banks are selected due to their keen interest to foster and maintain a strong working relationship with us and to collaborate with the company as we grow in Asia.”

Best practice and innovation

Instead of following the ‘best practice’ of selecting a regional banking partner, TVS Asianics went into this banking selection exercise with a long-term view of selecting the bank(s) that could meet its current business requirements and support its future plans in each country of operations under a central co-ordinated relationship management and IT. Business always comes first, so the management of TVS Asianics was looking for banking partners that understand how it operates and who were willing and committed to accompany the company in its growth journey.

Key benefits

• Exposure – TVS Asianics was introduced to a panel of banks in this banking selection process, opening the doors to future collaboration with new banks and increasing the banking network of TVS Asianics.
• Diversity – sharing the growth of the business with a panel of banks who were willing to invest in TVS Asianics, created a win-win situation for both TVS-Asianics and the banks.
• Commitment – TVS Asianics has strengthened its relationship with existing banks who were invited to participate in this selection exercise. The incumbent banks also demonstrated their willingness to be long-term business partners to TVS Asianics.