Payment and Cash Management

Liquidity Management

For Holding companies and companies with multiple subsidiary accounts, SABB has developed two methods of optimising liquidity.

Pooling

This method allows a company to maximise its liquidity by notionally combining account balances into one pool, without actually moving any funds. This means that debit balances can be offset by credit balances, with interest calculated on the net overall balance.

Cash concentration

This method allows a company to physically sweep account surpluses into a central parent account. Any account deficits are then funded by the parent account, eliminating subsidiary overdrafts and reducing interest fees.

Key Features & Benefits

Pooling:

Reduces your balance sheet and improves financial ratios
Cuts credit facilities by establishing a credit line at master account level
Interest rates improve since master accounts usually attract better rates than subsidiary accounts operating individually
You can reward cash-rich subsidiaries and penalise those in overdraft

Cash concentration:

Manages group liquidity centrally
Cuts borrowing costs
Makes administration easier
Balance concentration means better interest rates
Several sweep options allow maximum flexibility
Subsidiary accounts can maintain zero or pegged balances
Provides a platform for collections and disbursements

Contact us

For further details about how SABB Liquidity Management can help your business, please contact us:

Toll Free from within the Kingdom 800 244 4555

F rom a mobile or outside the Kingdom:+966 (01) 412 4770

Fax: +966 (01) 412 2376

E-mail: cashmanagement@sabb.com

SABB