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Norbert Huhn, head of accounting, Miele explains why UniCredit, which is part of IBOS, was selected by his organization. With a multitude of cross-border benefits, a strong local presence and a well-implemented support structure, he says IBOS offer a long-term banking partnership.

Miele Group was founded in 1899 in Northern Westfalia, Germany and is a global appliance manufacturer. The family-owned enterprise has a global presence in 47 countries in five continents and a yearly turnover of approximately EUR 2.8 bn.

IBOS and UniCredit Bank

The IBOS Association is an international banking alliance, focused on providing corporate customers with international cash management solutions. IBOS is the banking club of which UniCredit Bank is a long-standing member, and into which it has sponsored several of its affiliate banks, such as in Austria, Italy and the CEE region. IBOS services aim to deliver full-branch banking in the countries covered, as well as the cross-border services required by a centralised finance office for viewing balances and mobilising funds cross-border. IBOS currently covers 48 countries worldwide via 51 banks

IBOS enables UniCredit to provide standardised solutions for its international clients. UniCredit Group has a strong presence in its core markets of Germany, Austria, Italy and Central and Eastern Europe and IBOS partner banks enable UniCredit Group to access the same kind of reach into Western Europe.

What are the pros and cons of using a bank like UniCredit, which uses a banking network to deliver cross-border banking services?

Norbert Huhn, head of Accounting, Miele: Firstly, we were interested in working with a strong local bank within Europe that also offers a long-term partnership. We also wanted to optimise our liquidity management and streamline our account reporting within the Group. We already collaborate with international bank partners and so working with an international partner, who understands our requirements and acts on our level is very important.

Secondly, we were especially attracted to IBOS, initially due to their quick implementation. Their “easy- to-go” contracts were another attractive feature and we liked their ability to act with one simple standardised agreement and process for account opening as well as for cross-border pooling for international corporates. They assimilated various banking products so we received good assistance for our banking services and streamlined processes for our daily business. We could also make flexible amendments to our daily liquidity management.

Thirdly, and more specifically, MIELE was also especially attracted to UniCredit Bank, Germany, as we would be co-operating with a strong, proficient local partner and it was important to find an international partner who also had good local knowledge and an excellent understanding of Europe. For example, we were able to collect EUR funds to Germany using a harmonised, standardised solution  –a zero-balancing solution co-ordinated by UniCredit and implemented at each IBOS bank.

How does this approach work from the corporate´s perspective?

We have the relationship with one bank, which is also a member of IBOS, but in some other European countries, Miele also works with other local IBOS banks.

How effectively can IBOS network banks compete with global cash management providers offering similar services?

Frankly speaking, a harmonised cross-border cash pooling structure with unified agreements and information about the local “challenges” of cross-border cash pooling (laws, taxes) is an attractive element, especially with “strong” regional banks, who are able to satisfy both the local day-to-day needs of our business in several countries, and to link in to our cross-border structure. It really is of value when our local banks and our co-ordinating bank have already structured the basics for us to a high level. Otherwise we are negotiating in a triangle, which takes up too much time.

What are your objectives?

Firstly, we wanted to optimise our cross-border liquidity management in euros via a cross-border cash pooling system with same-day value (SDV) processing offered by a strong regional bank. Secondly, we wanted to optimise our EUR funds within Europe in a standardised form with a few, strong professional partners, who also offer regional knowledge and local banking services.

What is UniCredit delivering as part of the solution?

They advised IBOS on the local details we needed and suggested we use another IBOS bank, KBC, for the Benelux countries. They also negotiated our agreements, the cross-border pooling contract, conditions, periods, details etc. Finally, they provided us with negotiating support.

UniCredit is offering consulting and is streamlining the current EUR cash pooling structure. Based on the strong relationship between IBOS and UniCredit Group, they negotiated several points directly with KBC (including the price and conditions, the agreement details and a start date). It goes without saying that the “link” between Miele, the local bank, and the local Miele subsidiary is also part of this relationship.

What are the advantages and drawbacks for the customer?

The main advantage of this was a streamlined cash pooling structure. The harmonised cross-border pooling agreement enabled all participating parties to start within the proposed timeframe and prevented possible delays. The main drawback, however, is that presently there are only some IBOS banks that offer cross-border cash pooling on an SDV-basis. Although Miele’s local subsidiary for example, in Belgium, had to change their longstanding banking relationship, they were able to implement that relatively easily.

What are the IBOS partners delivering as part of the solution?

IBOS provides our local services and network, as well as the cross-border pooling solution, enabling a one-bank-per-country approach, and with a regional bank that can really do all the local business there, and not just payments, as they are proper commercial banks.

What is the support structure for relationship management, customer service and issue resolution?

The IBOS banks find technical and practical solutions for our local subsidiaries for their local banking business. The solution is co-ordinated by UniCredit Bank in Germany, out of their Bielefeld branch, which also co-ordinates other services. This means we have a “single point of contact “.This means we don’t have to compromise by, on the one hand, selecting a single co-ordinating bank here in Germany whose operations in the other countries are not full-service leading to restricted services for our local subsidiaries, or, on the other hand, having to choose and co-ordinate local banks ourselves.  That option rarely results in liquidity management with same-day value, and also demands a permanent supervision on our side to make sure it works operationally.

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