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 Redundant bank accounts in different overseas entities have been replaced by payments and receivables-on-behalf-of (POBO/ROBO) accounts opened in Hong Kong.