Cash & Liquidity ManagementPaymentsClearing & SettlementHSBC adds Germany to Two-way Cross-border RMB Sweeping

HSBC adds Germany to Two-way Cross-border RMB Sweeping

HSBC in Germany has won a mandate to implement a fully-automated two-way renminbi (RMB) sweeping solution between China and Germany for Würth Group, the global fastening products group.

After Hong Kong, Singapore and the UK, Germany is the fourth country in which HSBC has implemented the fully-automated, RMB two-way, cross-border cash concentration.

The solution enables Würth, located in more than 80 countries, to sweep funds from China to Germany and vice versa, making efficient use of its global cash balances. The agreement paves the way for the first implementation of its kind for the Chinese currency in Germany.

‘Sweeping’ is a critical part of a company’s ability to manage its cash efficiently, referring to the automated, physical movement of cash across borders from one country to another.

“RMB sweeping enables us to manage the liquidity of our Chinese group companies centrally from Germany and to integrate it into our global cash management,” said Patrik Imholz, head of treasury management, Würth Finance International.

“Surplus liquidity can be used to finance other group units, so insufficient liquidity can be balanced out by cross-border transfers, while interest and foreign currency expenses can decline as a result. Currency risks can also be managed centrally from Germany.”

The solution enables group-owned accounts to be settled beyond the Chinese national border: at the end of a working day, the accounts of Würth’s various national companies in China are settled via the master account of the group’s Chinese cash pool. The master account in turn is settled with a German target account via a special cash concentration account. Two-way cross-border sweeping has been possible for the Chinese currency throughout China since July 2014.

“The more payments are settled in RMB, the more valuable automated RMB cash concentration becomes for German companies,” said Gabriele Schnell, HSBC’s head of payments and cash management in Germany.

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