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Liquidity Management

TPV Gets Clearer Picture of Cash Flow

World’s leading maker of display monitors and LCD TVs automates liquidity deployment


About

Headquartered in Hong Kong, TPV Technology Limited (TPV) is the world’s leading manufacturer of display monitors and LCD TVs . The company develops, manufactures and markets some of the best-known TV and PC brands in the industry, including exclusive licenses for global distribution of Philips-branded monitors and TVs.

The Challenge

TPV has enjoyed strong global growth over the past two decades by leveraging its competencies in manufacturing, operational efficiency, and research and development. But as the firm expanded, TPV’s treasury team in Hong Kong faced the challenge of managing over 100 accounts across 40 entities globally.

In particular, TPV needed to overhaul its cash management processes in Europe, which were mostly manual. As it received payments in multiple currencies across 13 markets in the region, TPV encountered challenges related to:

  • A large number of local currency sub-accounts to facilitate local transactions. Mirror accounts of all currencies were also maintained at the regional level, further complicating their account structure
  • Manual processes associated with precise cash flow forecasting, booking of FX contracts and managing intercompany fund transfers to meet daily cash needs
  • Lack of visibility in managing currencies (some of which were yielding negative interests) across different accounts

Aside from addressing its challenges in Europe, TPV’s treasury in Hong Kong also wanted to gain greater visibility into its global cash operations and pool surplus cash at headquarters to maximize cash use

The J.P. Morgan Solution

TPV partnered with J.P. Morgan for our extensive network and robust global clearing capabilities. By understanding TPV’s key requirements, J.P. Morgan implemented a bespoke Just-in-Time (JIT) Funding and Cross-Currency Sweeps (CCS) liquidity solution for TPV in Europe.

The innovative solution in Europe includes:

  • Set up of a physical cash concentration structure to consolidate all of TPV’s local currency sub-accounts into a single Euro header account via an automated cross-border cross-currency sweep
  • Automated payment funding from its Euro header account into local currencies through J.P. Morgan’s JIT Funding capability, which automatically calculates the exact amount of funding required and moves cash into the desired currency when and where needed
  • Management of FX exposures through J.P. Morgan Access® FX, with J.P. Morgan providing standard spreads across all of TPV’s FX transactions
  • Host-to-host connectivity with SWIFTNet to automate payments processing and minimize manual file uploads

The cross-border CCS solution was also implemented in TPV’s Asia and U.S. operations. The structure facilitates the repatriation of surplus cash from regional accounts to the group’s account in Hong Kong on a monthly basis, allowing the treasury to pool balances and auto-sweep its operating balances between its bank and asset management accounts. The balances are further invested in J.P. Morgan’s money market funds to maximize yields.

J.P. Morgan’s Just-in-Time Funding and Cross-Currency Sweeps solution is a game-changer for us in Europe. It helped us rationalize our bank accounts, increased visibility of our surplus cash and automated our payment funding processes to deliver tremendous treasury efficiencies.

Tony Mo, Corporate Treasurer, TPV Technology Limited

The Result

Since implementing the solution, TPV has streamlined its account structure to achieve a 30 percent reduction in bank accounts globally. By further centralizing balances across its Europe operations into a single Euro account, TPV has been able to achieve full visibility and control of its cash positions and optimize the use of surplus cash.

The solution has generated significant cost savings for TPV in Europe by:

  • Eliminating manual cash processes, hence reducing administrative and personnel costs
  • Streamlining 13 mirror accounts at the regional level into a single account, reducing account maintenance costs and banking fees
  • Minimizing level of surplus cash in negative interest yielding currencies
  • Standardizing FX spreads for all of TPV’s transactions in Euros and local currencies

By eliminating highly-manual processes, the firm’s treasury can now allocate resources towards value-added activities to better support the needs of the business.

 

This webpage was prepared exclusively for the internal use of the J.P. Morgan client to whom it is addressed (including the client’s affiliates, the “Company”). This webpage is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan.

This webpage is confidential and proprietary to J.P. Morgan and is not intended to be legally binding. J.P. Morgan makes no representations as to the legal, regulatory, tax or accounting implications of the matters referred to in this presentation. The products and services described in this webpage are ordered by Banco J.P.Morgan, S.A., Institución de Banca Múltiple, J.P.Morgan Grupo Financiero and/or its affiliates, subject to applicable laws, regulations and service terms.

J.P. Morgan is a marketing name for the Treasury Services businesses of JPMorgan Chase Bank, N.A. and its affiliates worldwide.
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