SSC Arbitrage

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February 25th 2002 Credit Operations GCB Centralized Operations “SSC Arbitrage” Presentation Ph: (021) 111-444-444 ext.: 2556 DIR: (021) 241-7309 SSC Arbitrage B r a n c h B a n k i n g L e v e l @

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SSC Arbitrage Core Competencies of the Product Lowest Financing Mark-up Freshly issued SSC’s may be utilized as Collateral for another RF Facility No difference in Previous Processing Dynamics or documentation Profit from “issued SSCs” is higher than Mark-up charged on RF

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The line is for specified usage only; i.e. you can only buy SSCs from the disbursed line. The line will be 100% utilized by the client from the first day onwards. The client does not have access to his Current Account. There is absolutely no room for deviations. A new CA format has been developed only & only for this product. FCY Deposits not accepted as Collateral.

The Product itself...:

The Product itself... Minimum Collateral Value: PKR 5,000,000/- OR RF Line @ PKR 3,750,000/- Mark-up charged: 10% only (at present) Collateral Acceptable: LCY, DSC, SSC & US $ Bonds Credit Approval (CA) New format developed & forwarded to Branches; no significant changes. Loan Tenor: Six months or One year. Deviations allowed: None. Current A/c Status AMD has to open a new a/c even if one exist previously; checkbook & ATM card not to be issued. An Average CA limit of US$ 63,500/- (3,750K/59) would require Credit Policy approvals.

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Customer walks into Branch to avail facility Account Officer at Branch completes all documentation & collects initial collateral from client Operations books the line on ALS (System); Credit Policy Approvals to be in place before hand DAY 1 DAY 1 DAY 2 Cash Supervisor issues SSCs next working day to client. DAY 3 Start here 3 days to the client getting his SSCs... REMEMBER: Credit Policy approvals may take an additional day

This is how the calculations work out...:

This is how the calculations work out... Six months profit rate on SSCs Two Profit Payment Periods annually granted on SSCs 6.1 X 2 = 12.572 Compounded Profit for the whole year * * 11.28 - 10.00 = 1.28% Client’s Annual Yield after deduction of Withholding Tax etc. The Rate we charge him for the Facility He gets to keep this spread & walk away with the SSCs

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The client can pledge any collateral (except FCY) and avails a RF line against it. The line is utilized by the Cash Supervisor to issue SSCs to the customer. The “issued” SSCs MAY be used for availing another RF Facility from Citibank. The second RF Facility may be like any ordinary RF Facility where-by specific usage is “NOT” defined. The client may also use freshly issued SSCs for availing a RF Facility from a bank other than Citibank N. A. Please DO NOT encourage your client to avail this option available to him!

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Target HNWI’s through Branch Banking Channels Ensure all documentation is complete; no deviations allowed whatsoever Explain the dynamics of the product to the client; its complicated we know ! Give us your feedback for any problems &/or tough questions you may encounter 5 steps to the success of SSC Arbitrage... We will solve you queries & alter the product if within our reach to do so! REMEMBER: Incomplete documentation MAY result in increment of TAT & create Service Issues Product Success! Happy Selling!

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