Citibank, belonging to Citigroup, the world’s largest financial institution,is also one of the biggest foreign banks operating in Vietnam. It first established a representative office here in 1993, which was then converted to a full branch status in Hanoi in 1995. It received the license to open a branch in Ho Chi Minh City in 1998. Nowadays, the bank employs 150 people and has pioneered a number of innovative products in the Vietnamese market. Recently in Ho Chi Minh City, Citigroup Vietnam had conducted a new product-launch seminar on Accounts Receivable Finance Program and Factoring, thereby becoming one of the first banks in Vietnam to provide this service. In the context of Vietnam’s integration into the international economy, Accounts Receivable Finance Program (AR Finance) has become one of the most effective financial instruments to enhance enterprises’ competitiveness in a market that relies heavily on collateral.
Over 60 foreign and local companies from various industries have attended the seminar, which highlighted key benefits from these diversified financial solutions. AF Finance plays a new support role for companies accelerating cash flow by discounting their domestic or cross-border trade receivables at Citigroup.
" ARFP is an effective financial instrument with many outstanding advantages, especially in an integrating economy, demands for working capital, collection and risks management services are increasing This trade finance solution has been widely applied in Asia Pacific and now introduced into Vietnam. It especially benefits both large corporations and small, medium enterprises, who currently trade on open account basis and would like to facilitate their supply chain both globally and domestically." said Mr. Charly Madan, Citigroup Country Officer in Vietnam.
AR Finance is a financing alternative granted to sellers by specialized banks. It enables the seller to sell their receivables to the bank (which are stipulated in sales contracts between buyers and sellers).
The AR Finance process is as follows: The seller will deliver the goods according to the sales contract or buyer’s order. After the buyer has accepted the goods, the supplier will issue an invoice requesting him to make payment for the goods on a due date (generally less than 180 days after the invoice’s issuing date). Next, the supplier will bring those invoices and all related documents to Citigroup and ask for purchase. Based on the invoices, Citigroup will make a fixed advance payment to the supplier. Then, Citigroup will collect this debt on the due date mentioned in the sales contract from the buyer when they make their payment to the seller through Citigroup.
AR Finance has many advantages, bringing benefits to both suppliers and buyers. It not only helps meet the demand for capital of suppliers, and increasing liquidity for enterprises but also minimizes risks associated with receivables. Introducing AR Finance means the bank will bear the brunt of insolvency. With AR Finance, deferred payments are allowed, so that suppliers’ competitiveness, as well as opportunities for selling or exporting, will be remarkably improved. As for the buyers, AR Finance will help them to save time by creating opportunities to purchase goods and make payments later without having to resort to other sources of credit. The ability to manage all receivables at one bank is also a major advantage, which AR Finance brings to both suppliers and buyers.
Along with developing new products, Citigroup Vietnam continues improving and applying advanced technologies in order to provide its customers with the best services. The bank has been successful in implementing the electronic transacting process: “STRAIGHT THROUGH PROCESSING” (STP) in less than 3 minutes. This is a new development enabling Citigroup to help its customers carry out their transactions in the fastest and most accurate manner. By applying this, customers’ money will be transferred from Citigroup to the other receiving banks in less than 3 minutes from the time the money transfer order is made. All procedures of the transactions are automatically undertaken electronically. This feature benefits not only Citigroup by saving time but also benefits its customers by having their transactions processed in a faster, more efficient and significantly more accurate manner.
Electronic banking is one of Citigroup’s great strengths; enabling the bank to continue developing new products and providing best solutions for our customers. Citidirect, an Internet Banking System developed by the bank, is one important service; it is a global delivery platform offering all corporate and financial institution customers seamless, efficient, and secure access to Citigroup Web-based global banking capabilities.
With its ceaseless efforts, Citigroup is always the pioneering foreign bank in Vietnam in applying the most advanced technologies. This helps to improve, not only the banking facility in Vietnam, but also increases the competitiveness of the Vietnamese Finance and Banking industry in the process of international economic integration.
In recent years, the bank has continually demonstrated its strengths with many activities: such as monetary trading, business facilitating services, cash management, foreign exchange, interest rate, commodity prices and risk management. Citigroup is the first bank to supply services like interest “rate swap,” “commodity swap”, and other hedging tactics. Vietnam’s Citigroup Online Foreign Exchange Trading’s Platform, and Cititreasury.com (an information platform) have been extremely successful in Vietnam’s financial market. This, once again, showed Citigroup to be the country’s leading foreign bank by introducing the latest in financial technology. Further evidence of Citigroup’s dedication to Vietnam is that it is the first foreign financial institution to have regular coverage of the country’s economy. It should be noticed that Citigroup did the first ever US Exim deal, which financed Boeing 777’s for Vietnam Airlines.
Thi Van
Vietnamese
