Best in Class Treasury Solution in China Highly Commended: CCCC – CCCC Overseas Treasury Management Limited

Published: Jan 2024
Photo of Peng Guangsheng, Chairman and General Manager, CCCC – CCCC Overseas Treasury Management Limited.

Photo of Peng Guangsheng, Chairman and General Manager, CCCC – CCCC Overseas Treasury Management Limited.

Peng Guangsheng

Chairman and General Manager
CCCC – CCCC Overseas Treasury Management Limited

Formed in 2005, China Communications Construction Company, Ltd. (CCCC) is a majority state-owned, publicly traded, multinational engineering and construction company with its business expanded in more than 150 countries and area. To better manage its overseas cash, CCCC established CCCC Overseas Treasury Management Limited (COTC), its overseas treasury management centre, in December 2022.

in partnership with

Bank of China logo

CCCC creates COTC in Hong Kong to manage cash

The challenge

China Communications Construction Company, Ltd (CCCC) expanded its business and as a result has many overseas subsidiaries in over 150 countries with more than 2000 cooperative accounts, incurring enormous workloads resulting in lack of visibility. As a multinational conglomerate, there are many bank accounts which are managed separately and leads to a high amount being spent to understand the capital situation in various regions in a timely manner, and even harder to track changes in risk. Added to this there are difficulties in identifying new market risks due to the continuous expansion of the business.

As the company operates in so many jurisdictions, managing funds in such a decentralised manner leads to an increase in internal financing costs and high asset liability ratio within the group.

The solution

CCCC has set-up a corporate overseas treasury centre (COTC) in Hong Kong which is authorised to manage both local and foreign accounts and cash in order to accomplish effective cash concentration and disbursement. Through the COTC, the group has transformed its approach to liquidity management, enabling it to consolidate multiple banking relationships across regions, lower its asset liability ratio by balancing cash surplus and shorten between its subsidiaries, improve group yields as surplus funds are aggregated to maximise returns, to access real-time liquidity positions with global internet banking, lower operational costs and better manage the balance sheet.

COTC connects its overseas treasury management platform with banking partners with real-time and seamless host-to-host (H2H) connectivity. Currently, account information in countries and areas, including Australia, Indonesia, Singapore, Cambodia, Malaysia, Saudi Arabia, Kenya, Hong Kong, etc, is visible. Redundant bank accounts in different overseas entities have been replaced by payments and receivables-on-behalf-of (POBO/ROBO) accounts opened in Hong Kong.

China Communications Construction Corporation (CCCC) – Treasury Centre

Best practice and innovation

To realise fund concentration, the bank has customised a unique concentration and POBO/ROBO solution with a local and cross-border cash pooling structure for COTC to centralise its payments and receipts processing for various subsidiaries and locations.

The local and cross-border cash pooling structure allows companies to consolidate their cash balances at a united level, which enables better management of liquidity, reduces idle cash, and improves cash forecasting. In the meantime, the POBO and ROBO accounts remain zero-balance by using the auto-sweeping function on a daily basis. Funds will be centralised to the master account at the maximum level to realise efficient cash management and gain increased yields.

Key benefits

  • Cost savings.

  • Headcount savings.

  • Process efficiencies.

  • Improved key performance indicator (KPI) metrics.

  • Increased automation.

  • Risk mitigated.

  • Improved visibility.

  • Errors reduced.

  • Manual intervention reduced.

  • Increased system connectivity.

The Adam Smith Awards Asia is the industry benchmark for best practice and innovation in corporate treasury. The 2023 awards attracted 450 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia

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