Strategic Treasury

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An Award-Winning Approach to Global Transaction Banking Etihad Aviation Group was awarded Treasury of the Year in TMIís 2016 Corporate Recognition Awards. In this feature, Adam Boukadida, Acting Group Treasurer, discusses some of the latest initiatives undertaken by the company in banking and cash management, technology and collateralised loan obligation (CLO).

An Award-Winning Approach to Global Transaction Banking

An Award-Winning Approach to Global Transaction Banking 

By Adam Boukadida, Acting Group Treasurer, Etihad Aviation Group

 

In 2016, Etihad Aviation Group (Etihad) was awarded the coveted Treasury of the Year in TMI’s Corporate Recognition Awards, with particular reference to initiatives in banking and cash management, technology and collateralised loan obligation (CLO). In this feature, Adam Boukadida, Acting Group Treasurer of Etihad Aviation Group, describes the project and its outcomes in more detail.


Project background

At 13 years old, Etihad Airways is still young in corporate terms, and treasury was only established a decade ago, as a key strategic corporate function. Asa young business with an historic average annual growth rate of above 20%, establishing a formal or structured approach to banking and cash management had not been a priority in the past. As we expanded our geographical reach and complexity over the years, we built up over 100 bank relationships, with too many accounts, and disparate commercial terms and service levels.

In 2016, Etihad engaged in a multi-year change programme to transition from an airline to an aviation group. This process is now well advanced, and has included a complete re-engineering of our banking and cash management across the 71 countries in which we operate. Reviewing and rationalising our bank relationships has been an important aspect of this re-engineering project. Although we had been through formal selection and evaluation projects for other aspects of our treasury business, we had not done so for global transaction banking in the past. 


Evaluation and selection

We approached 14 banks with whom we had existing relationships that had the capabilities to support our transaction needs. We considered each one carefully against a rigorous set of criteria, including each bank’s depth of cash management solutions, commercial terms, footprint, service levels, technology, integration and straight-through processing (STP) capabilities. Based on this scoring, we conducted workshops with shortlisted banks and ultimately made the decision to appoint First Abu Dhabi Bank (FAB) and Citi as our primary banking partners for our Middle East and global business respectively. In addition, we continue to engage other banks selectively in a few locations.

We connect to our banks via SWIFT wherever possible, which is important from a security, scalability and process automation perspective. In addition, SWIFT provides us with a single infrastructure both to connect to our existing banks, and support our banking needs and relationships as these evolve over time. We are now rolling out SWIFT across our footprint, including other equity partners wherever possible.


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