Bankers reveal trend of decentralizing financing decisions in Asia

HSBC’s Laurens and Citi’s Saxena concur that the need for decentralization increases as financial centers move from West to East.

ABF: Investment in Asia is dependent upon being able to show profit margins and potential growth. What’s your take on the increasing need for companies in Asia to manage their balance sheets directly?

HSBC: John Laurens, Head of Global Payments and Cash Management
The growth and profitability story amongst Asia’s markets is driving increased focus and investment into the region. Although the uncertainties in 2012 may result in a slowdown, given the rising power of the Asian economies, the longer term trend is growth.

As the financial centre of gravity for many companies moves from West to East, the need to increase management control and visibility in the region increases. Corporates are either establishing regional management and financial centres in Asia, as critical mass makes these economically viable, or are building out existing regional HQ/ treasury centres.

Citi: Ravi Saxena, Managing Director, Asia Pacific Trade Head, Global Transaction Services
Increasingly, clients are recognizing that there are benefits by decentralizing some of the financing decisions. Post-2008, there was a fair degree of pressure in terms of capital and liquidity. You could technically raise financing here in Asia cheaper than in other markets. So my view is that while the capital centers of the world are widely interconnected, there are still certain pockets where you can get benefits in terms of competitive financing , and this can be leveraged by clients. And if you are a global organization, you can leverage that to your advantage and that is a competitive advantage that we at Citi can offer our clients given our global network in over 100 countries and in 17 markets in Asia.