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Receivable discounting solution Single obligor approach Full recourse versus non-recourse

Receivable management Ireneusz Kowalewski Trade Finance Department Head tel. 657 7272 irenueusz.kowalewski@citigroup.com Mateusz Niemczyk Trade Sales Head tel. 657 7051 mateusz.niemczyk@citigroup.com. Bank’s role in receivable management –1. Receivable discounting.

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Receivable discounting solution Single obligor approach Full recourse versus non-recourse

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  1. Receivable managementIreneusz KowalewskiTrade Finance Department Headtel. 657 7272irenueusz.kowalewski@citigroup.comMateusz NiemczykTrade Sales Headtel. 657 7051mateusz.niemczyk@citigroup.com

  2. Bank’s role in receivable management –1. Receivable discounting • Receivable discounting solution • Single obligor approach • Full recourse versus non-recourse • Financial versus non-financial • Public Sector 1 Buyer Supplier 2 4 5 • Supplier financing • Target market • Advantages for buyer:Payment terms, pricing negotiations, relationship • Advantages for supplier:Liquidity, no collateral, low costs 3 1. Supplier issues the invoices / delivers the goods 2. Byuer accepts the invoices and sends them to the Supplier 3. The Supplier submits the application for receivables discounting together with the invoices and buyer’s acceptance on invoice 4. The Bank credits the Supplier’s account 5. Buyer credits BH account on the invoices due dates

  3. Receivable discounting –electronic platform • Electronic request for discounting • Web-based reports for all parties • Settlement and reconciliation on due date • System security and efficiency

  4. 2. Trade Revolving Loan (Handlowy Kredyt Rewolwingowy) Unique solution on the market – end to end process covered by electronic platform • Weekly verification of adequacy of collateral andsubsequent automatic weekly adjustment of theavailable line • Comprehensive Early Warning MIS • Monthly verification of Customer’s debtor performance • More efficient use of Client’s assets (higher advance rates as compared to currently offered loans supported by receivables) • Providing comprehensive information to a customer on payments (matched with individual invoices) • Enhanced debtor payment discipline through soft collection function provided by the Bank • Working capital revolving loan • Supported by acknowledged assignment of receivable • Level of eligible receivables electronically verified – weekly • Size of revolving line adjusted – weekly • Payments matched against individual invoices(electronically)

  5. 3. Limited recourse export receivable financing Limited recourse trade receivables discounting for OECD countries Eligible: open accounttrade receivables with payment terms up to 180 days Program under specificinsurance agreementbetween KUKE SA and Citibank Handlowy Citibank Handlowy is the beneficiary of the policy, the exporter does not make self-insurance in KUKE SA the insurance covers95% of invoice value the policy coverspayment, political and catastrophic risk Soft-collection and recourse procedure, conducted by Citibank Handlowy and KUKE SA New product underway: domestic receivables discounting with KUKE SA insurance

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