Setting up a new treasury entity in China in just three months
Even after the spinoff of Siemens Mobility, Plenio looks to enhance his treasury team going forward
TREASURER OF THE YEAR, CHINA – MATTHIAS PLENIO
WHEN Matthias Plenio was told he had to set up a new treasury entity in China for Siemens Mobility as it was being spun off in 2018, only three months were given to Plenio and his team to complete the whole process.
“With the splitting off of the mobility business in China, according to national regulations, Siemens’ group finance company was not allowed to provide any kind of financial services to the mobility business,” recalls Plenio, executive director and general manager at Siemens China Finance, in an interview with The Asset. “That meant from October 1 (2018), no more services would be provided by the group finance company.”
Having driven this entire internal treasury transformation in China as the head of treasury for Siemens China, Plenio is also a member of the board of directors and general manager for the group finance company, Siemens Financial Services Ltd. China.
In China, like most large local corporates and multinational corporations, Siemens has a group finance company that works like an in-house bank. According to China Banking Regulatory Commission, group finance companies are only allowed to provide financial services to group subsidiaries in China.
Siemens set up its own finance company, a non-bank financial Institution approved by the People’s Bank of China, in 1998. Since then, Siemens has used this finance company as an in-house bank to serve its subsidiaries in China.
In March 2018, Siemens and Alstom announced that they had entered into an agreement to merge their mobility businesses globally, though this was later blocked by the European Commission in early 2019. To prepare for the mobility merger with Alstom, Siemens had initiated the internal spinning-off process of its mobility and other related businesses at the global level.
In line with the spinoff of Siemens Mobility, a separate and independent treasury team had to be set up to handle the treasury and finance functions of Siemens Mobility in China. In addition, Siemens Mobility would obtain financial services from commercial banks in China instead of from Siemen’s in-house bank.
For Plenio, it was not an easy task as Siemens was suddenly required to set up several legal entities with new bank accounts in both renminbi and foreign currencies for Siemens Mobility. Various supporting documents were also required for the know-your-customer process. This all had to be done quickly as Siemens Mobility’s treasury system had to be ready within three months.
In a bid to speed up the setting up of the new treasury team, Plenio and his team appointed Deutsche Bank, one of Siemens’ several banking partners which includes both Chinese as well as foreign banks, to handle the whole transaction.
The full package of cash management solutions from Deutsche Bank included almost everything such as banking facility reallocation, account receivables and account payables processing (for both domestic and cross-border businesses), liquidity management (from bilateral entrustment loans to cash pool), as well as investment, electronic channel establishment such as online banking, and system integration.
On the other hand, the internal restructure of the Siemens treasury team meant that some of his team members had to be shifted to the new Siemens Mobility treasury entity, according to Plenio.
Even after the spinoff of Siemens Mobility, Plenio looks to enhance his treasury team going forward.
“Siemens Mobility is outside the service scope of the group finance company. But there is still a service level agreement in place between Siemens Mobility and Siemens China treasury though they are separately managed,” says Plenio.