MANINDER BHANDARI is managing director & head of Middle east & africa for Treasury services at bny Mellon. Cash & Trade caught up with him to discuss the ways in which the economic crisis has altered Mena trading patterns and the region’s next step in treasury solutions.
If money really does make the world go around, then effective treasury management is about making the world go around more efficiently. Maninder Bhandari has been with bny Mellon for just over a year and has been crucial in the bank’s drive into the developing markets of the Middle East and Africa. he has brought a career’s-worth of treasury and operational experience in developing markets to bear on building bny’s peer-to-peer intermediary banking expansion in the region.
However, Bhandari joined bny Mellon in the middle of the most challenging period for financial markets in a generation, and was at the helm when Dubai started to founder under billions of dollars of debt, sending shockwaves throughout the region.
Has the global financial crisis and, more relevantly, the local turmoil in the Gulf markets created new trading opportunities, or has the volume of trade skidded to a halt?
I think there has been too much focus on Dubai. yes, dubai Inc. has had some problems but has since met its international debt obligations in the credit crunch. however, to banking professionals in the region, this was an unexpected surprise. Its partner in the UAE, Abu Dhabi, stood shoulderto- shoulder with its brother emirate. I think Dubai’s problems have been over-exposed in the Western media, and the world needs to understand that there is the whole Middle East. The region is dynamic, rapidly developing and doing amazing things – even in a global economic contraction. Qatar, Saudi Arabia, Bahrain, Abu Dhabi, Oman,Egypt, Libya are all rapidly developing markets in their own rights, with their own financial trength, driving fundamentals and positive economic stories. The Dubai situation created a ripple, but by no means is it a tsunami and confidence across the region remains strong. dubai will rebound.
What has been learned from the Dubai debacle?
The global crisis has made people look more at risk and not just fixate on returns. In the Gulf region, dubai’s problems have seen a reversal to fundamentals. at the peak of the crisis, we saw a flurry of local money come back to the region looking for a safe haven, which helped with
the local banks’ liquidity position, and some banks, especially those in saudi arabia, have been quite well capitalised.
What made you want to join BNY Mellon?
I had spent years running the treasury function of Emirates ND, who I joined in 2003 from ABN Amro. I had been appointed to develop Emirates NBD’s counterparty relationships with banks and prior to this to build up the bank’s treasury services in the Middle East. although working at Emirates NBD was a fantastic and valuable experience, BNY Mellon was offering a role that had an international perspective to it where I could use the developing market experience I had gained throughout my career.
The region that I oversee is vast, running from azerbaijan to south africa, from Morocco to Pakistan. It is also an exciting and diverse region with many wonderful opportunities for business expansion. also, the institution of BNY Mellon is one of the largest and most respected names in banking. It has, in one form or another, been in continual operation since the 18th century. Many banks are being tested by the current
global banking crisis.
BNY Mellon has not only seen this crisis, and the oil crisis of the 1970s, but the Wall street Crash of 1929, and survived the Great depression. each time it has emerged stronger and fitter, and is such a well-respected organisation that the us government used it as the custodian of the TARP [Troubled Asset Relief Programme] funds in the recent bank bailout. When an institution like that comes knocking, asking you to help them expand into new, exciting markets, it’s hard to say no.
What can you do for your clients?
We are the plumbing in the kitchen. It’s the treasury services’ job to remove as much pain as possible for local banks transacting internationally. On the cash management front for example,we make sure that regional banks can be sure that money can be delivered in the right currency at the right time anywhere in the world. because BNY Mellon is such a large multinational institution, it can negotiate and deliver money through
counterparties in many countries of the world. If it doesn’t have a direct relationship in any territory, it can work through its global network to find
an institution that it deals with that has a counterparty relationship in that territory to allow a bank to execute that transaction. My line of business offers support anywhere in the world, and will represent the local bank to ensure a transaction is executed in full and on time.
If an institution transacts business in numerous currencies globally, treasury can help consolidate and manage its cash efficiently in a number of accounts. On a technological level, the bank has spent billions of dollars on its IT infrastructure, and by offering clients ‘plug-in and play’ technology solutions, we can help them make a major capital expenditure saving by offering then cutting-edge back office transaction
processing systems and integrated treasury solutions.
What do you mean by ‘integrated treasurysolutions’?
Treasury solutions are the range of products and services offered by banks to aid the smooth and efficient operation of a company’s physical and financial supply chain and hence its working capital. They involve the provision of adequate and timely liquidity, the minimising or mitigation of credit and operational risk and the optimisation of cash flow management. such products and services are usually supplied through a company’s house bank.
The two key treasury solutions areas – Trade finance and Cash management – have traditionally been offered through two quite separate banking areas, although both have a major bearing on the efficiency or otherwise of a company’s working capital. This is often both reflected by, and a reflection of, the separate treatment of these areas by the companies themselves. developments in IT have the potential to revolutionise this situation, allowing for the provision of integrated treasury solutions. This is the case in both trade services, where the migration towards electronic
documentary processing has driven up confidence in the reliability and efficiency of transactional services, and cash management, where electronic payments systems have helped optimise company cash flows.
The efficient combination of these two processes offered seamlessly to companies, usually via a bank, is what we mean by integrated treasury solutions. at BNY Mellon we offer local banks the opportunity to provide this to their customers by using both the technological and operational resources we have built up over the years at our firm.
Why is the Middle East so attractive to BNy Mellon?
It’s an unexplored market. BNY Mellon has been operating in the Middle East and Africa region for nearly a hundred years, but there are new, increasingly important markets both strategically and economically that are not fully explored. The firm has been around since the 18th century, and is not going to disappear. We are stable and steady and this stability, networking strength and dependability is attractive to the financial institutions of the region.
The region is exciting and vibrant, and when the rest of the world is licking its wounds, countries like Libya, egypt, Turkey and Qatar, amongst others, are all confidently stepping into the limelight. BNY Mellon wants to align itself with the world’s future economic tigers, as well as having its foundations in a pedigree and history that few firms, globally, can match.