Moving up into a senior treasury role is an exciting but challenging step for any finance manager, no matter how experienced. To help professionals navigate the earliest phase of that journey, the Association of Corporate Treasurers (ACT) – in partnership with Deutsche Bank – has published a new handbook, The Group Treasurer: an ACT guide to the first 100 days. As well as arming new senior treasurers with in-depth insights on how to acclimatise to life in the treasury function’s top level, the guide provides a valuable refresher on the latest crucial developments in the profession.
In a statement, the ACT noted that treasury departments are often staffed by people who move across from other finance disciplines. As their careers develop, those individuals tend to face a host of new – often alien – concepts, which can pose hurdles as they strive to get up to speed. With that in mind, the guide sets out a comprehensive compendium of need-to-know information, starting with basics on the role of treasury, how departments are set up and key areas of treasury policy. It then takes a series of deep dives into points such as:
Deutsche Bank global head of cash management Ole Matthiessen said: “We have looked to create a guide that goes back to basics – and the ACT seemed the perfect partner for this. While the ACT can provide treasury professionals with training and qualifications necessary for a successful career, Deutsche Bank, in its role as a trusted adviser, can provide up-to-date insight on the options available for treasurers in the market.”
ACT chief executive Caroline Stockmann added: “I hope readers will find the guide a useful tool. And remember: the ACT is here to support you, whether you are a member or not, as our mission is to embed the highest standards of professionalism and integrity in the treasury world, and act as its leading advocate.”
Large M&A deals of $5bn or more have skyrocketed over the first three-quarters of the year, reveals Mergermarket. In its latest Global & Regional M&A Report, the specialist tracker notes that heavyweight deals have surged by a whopping 256% from early January to the end of September this year, reaching 32 transactions worth a total $451.3bn in the third quarter. This marks the biggest explosion of large deals since Q4 2015.
The two largest transactions of Q3 2020 were PetroChina’s disposal of major pipeline assets to PipeChina for $49.1bn and Nippon Telegraph and Telephone Corporation’s purchase of NTT DoCoMo for $40.4bn.
However, in a statement, Mergermarket pointed out that despite the “valiant effort” of the large deals segment, it was unable to compensate for a “difficult” period from January to June. “Year-to-date,” it explained, “2020 has seen $1.86 trillion in deals compared to $2.58 trillion for the same period in 2019, representing a 27.9% decline. The first half was marked by a large number of lapsed and cancelled deals because of the uncertainty over COVID-19, as well as financial distress that led to a lack of overall activity and lower numbers.”
It continued: “The total number of M&A deals continued their falling trend line. The third quarter saw just 3,494 total deals, representing a drop of 31.6% compared to Q3 2019 (5,106 deals). Year-to-date, total deal volumes are lower by 26.7% in 2020 compared to 2019, with 11,214 total deals versus 15,306 last year.”
In one particular industry, though, the commercial effects of the crisis have triggered a more fertile climate for M&A – with potential for even greater activity in the coming months. “As the pandemic accelerated the uptake and rollout of online remote services,” Mergermarket added, “technology media and telecom was one of the [year’s] busier sectors. In the third quarter, it fully emerged as the most active for [M&A], with 760 deals totalling $301.2bn. That total could reach even higher with the possible divestiture of TikTok by ByteDance, which could be worth as much as $60bn.”
Dozens of firms listed on the UK’s Alternative Investment Market (AIM) have been forced to scale back investor payouts as a result of the pandemic, a recent analysis of official company data has found. Conducted by investment holding company MBH Corporation, the study revealed that between 17 March and 5 October, 88 AIM dividends were suspended, 41 were cancelled and 17 were cut.
Hosted at the London Stock Exchange, the AIM is the UK’s most prominent shop window for investment in dynamic, high-growth enterprises with the potential to become tomorrow’s corporates. Around a third of the firms on the index pay regular dividends. In 2019, total dividend payouts from AIM stocks hit a record $1.3bn – but estimates cited in the analysis indicate that this year’s tally could represent a fall of 34% to 48%, to somewhere between £698m and £873m.
However, the study also shows that the situation has begun to improve. Of the 56 dividend changes recorded between 17 and 31 March – during the pandemic’s flashpoint – 55% were outright cancellations. But in the period between 1 July and 5 October, 12 dividends were suspended, three were cut and none were cancelled.
MBH Corporation CEO Callum Laing said: “When it comes to investing in shares, dividends make up a huge part of total returns. Those companies that pay dividends are also more likely to deliver smoother returns than those that rely solely on capital gains.” He noted: “Dividends and dividend growth are important indicators of company financial health and potential for longer-term growth.”
Major US peer-to-peer (P2P) finance platform LendingClub has ceased offering services to retail investors, winding up a business model of 14 years’ standing. The firm cut off its retail notes programme on 8 October as part of its planned transformation into a ‘full-spectrum’ fintech marketplace bank – a process that will take effect only when regulators sign off on its recent acquisition of Boston-based Radius Bank for $185m. While the platform’s current crop retail investors will continue to earn interest until loans agreed through the firm are settled or run into default, no new entrants will be admitted.
LendingClub announced its decision in an 8-K filing with the US Securities and Exchange Commission, stating: “In connection with, and in furtherance, of the [Radius] merger, LendingClub has been in regular contact with federal banking regulators and, on 25 September 2020, filed an FR Y-3 application with the Federal Reserve to become a bank holding company. Further, as LendingClub progresses in its objective to become a full-spectrum fintech marketplace bank, the company has been evaluating its current and future product suite and has started development of new products aimed to better serve its customers. LendingClub plans to offer a full suite of products as a bank.”
P2P experts have greeted LendingClub’s move as the last gasp of what was one of the most talked-about business models in the fintech industry, but which never quite fulfilled its potential. One such voice is Matt Burton, founder of fintech platform Orchard – acquired in 2018 by SME lender Kabbage – which specialised in connecting marketplace lenders to institutional investors.
Speaking to LendIt Fintech News, Burton said: “While the fintech industry has been moving away from P2P lending since 2016, LendingClub’s decision to shut down its retail P2P platform marks the end of an era. P2P lending was my entry into the fintech space in 2010. During its rise it had the promise to transform lending into a more transparent and democratic process. Hopefully, future entrepreneurs will find a way to break through where P2P failed.”
Mainstream lender Commerce Bank and treasury software provider HighRadius (no relation to the above Radius Bank) have expanded an existing partnership, with the aim of boosting the bank’s services to its corporate clients.
The organisations started working together two years ago, and last year deepened their arrangement with the launch of jointly developed Electronic Invoice Presentment and Payment (EIPP) and Virtual Card Processing (VCP) tools.
Under their new, expanded collaboration, Commerce Bank clients will have access to the full suite of HighRadius’s Integrated Receivables and Treasury Management products. The move comes as corporates are increasingly looking to their banks to help them modernise their accounts receivable and treasury operations.
Commerce Bank senior vice president, director of Treasury Management Services, Todd Adler said: “The world is changing more quickly than ever and our opportunity lies in evolving alongside it. To this end, we bring together best-in-class products with exceptional teams dedicated to understanding and accepting our customers’ unique challenges. We’re excited to take our clients through a digital transformation journey.”
HighRadius chief product officer Sayid Shabeer added: “Our artificial intelligence- (AI-) driven suite of products will streamline the receivables processes to be more effective and efficient for Commerce Bank clients. In this digital-first economy, AI is a critical component of their digital transformation.”