The challenge
With rapid business growth, ZTE saw a critical need to partner with a highly rated bank whose guarantees are widely accepted with the ability to provide a global guarantee programme which meets its needs for a centralised trade guarantee solution. This was required for its overseas carriers’ network project to maximise operational efficiency and improve control and visibility. However, with systems and multiple entities, it faced many challenges.
Guarantee issuance with tight turnaround time across three continents for ZTE’s overseas subsidiaries denominated in multiple languages was a key issue to address. In addition, long tenors covering 5G and other carriers’ networks involved varied and exotic governing laws.
The solution
ZTE implemented a robust solution which addresses the challenges it needed to overcome to satisfy its global guarantee requirements. Its chosen banking partner, BNP Paribas leveraged its global network, market knowledge, expertise and understanding of ZTE’s business to create the solution.
The solution enables the issuance of bank guarantees for ZTE Corporation and its wholly owned overseas subsidiaries and takes account of local language differences and local law considerations as well as the company’s long tenor requirements.
Best practice and innovation
Simplified the credit procedure of bank guarantee (BG) facility – the solution which enables ZTE to issue BG for ZTE Corporation and its wholly owned overseas subsidiaries is complemented by a simplified credit procedure which has been customised by its bank. Overall, ZTE’s treasury team was able to improve its efficiency and maximise its use of the facility.
Streamlined the bank guarantee application procedure – in order to optimise the client experience, the end-to-end solution comprises a customised application process and form which helps streamline the processes for the company; this greatly helped the ease of use and efficiency of ZTE’s daily operations, as well as significantly improving turnaround time of engagement and documentation with its buyers.
Synergistic partnership and relationship management
ZTE and its bank share the common goals of placing sustainability and corporate responsibility at the heart of their business models at global, regional and local level in China.
Key benefits
- Operational efficiency improved with standardised process for overseas bank guarantee issuance.
- Improved transparency and controls in bank guarantee facility usage.
- Cost savings and local expertise engagement to improve whole procedure.
- Replicable and scalable for future overseas expansion.
By being proactive, thinking creatively and leveraging the expertise of the bank, ZTE has been able to create new capabilities and improvements in operations, finance and treasury functions to manage the business. Most importantly, this solution is scalable to meet ZTE’s growing business aspirations globally.
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