U.S. Bank Global Transaction Services U.S. Bank Global Transaction Services

U.S. Bank SinglePoint is a registered trademark of U.S. Bancorp.

Presented to SBDC of IllinoisEric TrejoVice PresidentInternational Division

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The International Challenge Operations are global Banks are numerous and widespread Resources are limited Do more with less…

• Maintain foreign bank accounts

• Actively manage group liquidity

• Keep costs low

• Manage risk

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Options Do nothing

• Continue to spend time, effort and cost maintaining each account directly using each foreign bank’s proprietary electronic banking platform

Move to a “Global Universal Bank”• No such thing as a truly “Global Bank” – meaning a bank that has a service set full

enough to meet all customer demands in all countries

• More likely, these so called “Global Banks” have a full service set in a few countries, and a more superficial capability in several others

Leverage a focused multi-bank solution…

U.S. Bank SinglePoint is a registered trademark of U.S. Bancorp.

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The Multi-Bank Solution

Does your bank offer SWIFT to facilitate the exchange of information and instructions with your overseas banks?

Does your bank manage the connection to your existing banks, and able to offer referrals for new international banking relationships?

Does your bank provide a gateway for international information reporting and a method to execute payments remotely on your overseas accounts?

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Liquidity Management Manage your company’s international liquidity

using a Multi-bank Platform for International Information Reporting and International Request for Transfer• Access timely and detailed balance information

providing a “real time” view of your USD and foreign bank balances

• Optimize cash balances by maximizing investments and minimizing debt

• Actively control the flow of funds between your global accounts from one access point

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Sample Account Structure

MT101MT101Payments

MT940 MT940Information Reporting

GBP Account

CAD Account

EUR Account

SWIFTU.S. Bank

Foreign Bank 1.

Foreign Bank 2

Foreign Bank 3

Your Organization

MT101

MT101

MT940

MT940

MT101

MT101

SinglePoint

Swift Message Type:MT101: International Request for TransferMT940: Previous Day Statement Reporting

Foreign Exchange Risk ManagementForeign Exchange Risk Management

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Foreign Exchange Marketplace

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Foreign Exchange Products Defined Spot

Purchase / sale of one currency against another; For value (delivery) two business days from trade date (1 day for USD/CAD)

Forward Outright Purchase / sale of one currency against another at set rate for future settlement Rate comprised of market spot rate as well as forward points

FX Swap Agreeing upon two separate FX contracts for two separate value dates Typically involves spot value date against a future settlement date

Non-Deliverable Forward Synthetic forward contract settled against a deliverable currency; used for currencies

that are not freely traded

Option The right but not the obligation to purchase or sell one currency against another for

particular tenor, notional, and price

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Risk Management Process

Step 1: Define FX Risk Management Philosophy and Objectives

Step 2: Identify and Quantify FX Exposures• Include all relevant parties such as treasury, sales, tax, and accounting. What are our specific

risks?

Step 3: Develop Risk Management Policy and Strategy• Simply eliminate FX risk or are opportunities to maximize revenues present?• What hedging instruments will be used? Who is authorized to deal? At what limits?• Who will confirm and settle deals? Who will sign confirmations?

Step 4: Execute Strategy

Step 5: Monitor and Measure Strategy Performance

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Needs Spectrum - International Services

Degree of Globalization:

Wholly domestic

N/A

Limited foreign sales /

suppliers

Letters of CreditForeign ExchangeInternational Wires

Trading with…

Significant foreign sales /

suppliers

Automated trade services

FX hedging

Foreign sales office(s) / retail

outlet / Procurement

In-country accountsCoin / currencyLocal branch access Local payments / collections

Global position mgmt

Foreign management

offices

Global liquidity management

Pooling / netting

Extensive foreign

operations

Full array of global services

Global Banking Services Required:

Operating in…

Slide Concept courtesy Treasury Strategies

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Q & A