Centrus Analytics Services – Treasury professionals are operating in a challenging environment of increased regulation, more diversity in terms of availability of investments and liabilities as well as greater demands in terms of disclosure requirements. This generally requires them to organise their teams and processes more efficiently from a risk management and timing perspective. Challenges such as increased productivity through automation of tasks and strengthening internal controls have been high on the treasury agenda recently. At Centrus, using the powerful combination of treasury and accounting expertise along with sophisticated treasury technology we have been supporting clients through the entire treasury management process. This is from the deal capturing stage, through to information processing and subsequently during the analysis and presentation of outputs.
Due to more stringent derivatives and banking regulations, the use of derivatives has become more complex and often includes higher associated charges. This is particularly material when residential, property, utility and other corporate clients enter into long dated derivatives transactions they have to pay high charges. Often the majority of these charges relate to credit risk and the related provisions that banks needs to hold over the life of the transactions. The use of collateral agreements which are called Credit Support Annexes can be used to mitigate counterparty risk and associated credit charges. Depending on derivative portfolio movements, an entity may have to post collateral, cash or assets, against the mark to market of that portfolio.
Centrus can provide collateral management services as an extension of the valuation and reporting services through the use of treasury technology. We can support with calculation of margin calls taking into account:
- Portfolio market to market using consistent discount methodology to bank counterparty
- Credit support annex terms:
- Minimum transfer amount
- Margin call frequency
- Type of collateral
Our approach is to use the TITAN™ collateral management module and customize accordingly to client requirements.