Finalysis and the Nature of the Banking Relationship



  • Bank interests are not aligned with those of corporates
  • A holistic and strategic treasury view is vital
  • Independent consultants provide valuable oversight
  • Finalysis completely review treasury and banking arrangements delivering an average of €20k value for each €10m in turnover


Banking has been around and developing for centuries 

A corporate banking relationship normally starts out as one of a modest functional service. Developing into serving debtors and creditors, then progressively moving into areas such as deposits, cash security, investments, currency, and other treasury services.

The banking relationship is of course immensely important and is central to the corporate business. It is accordingly important that it be structured and managed appropriately and be reviewed over time to ensure that it is also appropriately adjusted, in terms of services and pricing, to the corporate’s changed circumstances and status.

The Silo – Based approach

However, with the growth of the corporate, its activities tend to divide and to become silo–based: e.g. Borrowings, Current account operations, Deposits, Cash Management, Investments and Currency. To keep up with those developments, Banks themselves have developed specialist departments to deliver those services also thus reinforcing this silo- based approach

Sight of the big picture is accordingly often lost.

Role of the Bank

After the regulator, the main priority of Banks is to their shareholders. Thereafter, their responsibility is to their customers. It follows that Banks are not incentivised to volunteer banking efficiencies to their clients at their own expense. Examples include whether too many bank accounts are being operated, whether the hedging level is optimal and best priced, whether there are more cost-efficient alternatives to existing term loans etc. Even whether a corporate may have out- grown the services and capabilities of a particular banks.

Role of the Auditors

The auditor cannot and does not consider the operating cost or competitive efficiency of a corporate’s banking relationships.

Role of Corporate Treasury

The corporate treasury positions are normally filled by the best qualified and most experienced accountants available to the Board. They are not normally bankers, equipped with a full understanding of loan and currency pricing, the idiosyncrasies of money transmission, best use of options etc. Corporate Treasury often does not have access to the benchmarks which might tell them if they are receiving best practice or competitive pricing. A holistic and strategic view is lost sight of in the busy day to day operations.

Role of the Corporate Treasury System  

The objective of your system is to provide a record of the up-to-date positions across accounts, locations and currencies.

Depending on the system you may find it confined to one bank, location or currency. Several agnostic instances of a system may be installed to overcome this.

Sight can easily be lost of the true gross and net positions.

The Treasury system may be compared to a chess board, reporting on the various positions but not advising on which moves to make!

Role of the Independent Banking and Treasury Consultant

The cost of financing and associated banking services is a significant corporate overhead, typically representing some 20% of costs. Yet corporates tend to rely, in hope, on the quality of their own banking relationships to deliver best strategy and pricing.

The Treasury and Banking Consultant on the other hand has no conflict of interest and   brings full independence to bear, along with a valuable familiarity with best practice. Critically, the consultant understands funding issues, cash management, alternative treasury systems, loan maturities & pricing, currency risks & costs and the proper use of swaps and options.

An independent consultant has all the benchmarks for comparable corporates, including Bank charges, and is able to share these observations with clients, to ensure that these superior arrangements are negotiated with the client’s bank in a business-like non-aggressive way.

When the corporate is negotiating substantial new loans the Consultants, as experienced former senior bankers, with a knowledge of rates and of the strengths and weaknesses of the individual banks, can recommend those banks which are best placed for those loan maturities or facilities. Similarly, advice on which banks are best for remuneration of  surpluses or for consolidating contrary positions, sometimes across currencies, is extremely valuable.

Role of Finalysis 

Finalysis is has been helping Irish corporates and organisations for over 3 decades and has completed more than 350 treasury and banking reviews.

Finalysis is fully independent and works only in our client’s best interest.

Employing talented former bankers and proprietary software Finalysis saves each company it works with an average of €20,000 per year for every €10m in turnover.

The Finalysis Approach

The proven best approach is to firstly identify the ‘Aggregate and Net Corporate Positions’

However big or small a corporate, Finalysis’ objective for Banking and Treasury management is the same, that is to identify and manage the corporate Net Position efficiently, at lowest cost and with minimum risk to liquidity and currency.

This objective is not served by the silo -approach, discussed above, which seeks to optimise the many divisions within the corporate’s finances, often without reference to each other.

Instead, Finalysis’ Top-Down approach requires that one first identifies the corporate’s Net position and manages out from it.

  • Finalysis examines Banks employed, all borrowings, rates and maturities, liquidity policy, selection of the functional currency, hedging policies and management, transparency of positions, rates and costs, investments and returns, all transactions costs and general Bank Charges.
  • The best measure of the adequacy of a corporate’s banking arrangement is to capture a helicopter view of the group’s business, purchases, and sales, domestic and foreign, and to check that this position is fully captured and is rationalised within the bank’s own, or an independent, treasury system, that the net position is reported and managed daily and that the total cost is measured against it!
  • Crucially, Finalysis maximises a corporates natural positions by identifying localised or isolated treasury activities and create amalgamations to leverage offsets.
  • Finalysis reviews the Chairman’s report in the corporate accounts to ensure that the observed banking arrangements are delivering efficiently and continuously on those objectives.

It is very rare and would be highly unusual not to find significant operating and cost inefficiencies.