Thai government pension fund picks Citi

Citi to handle payments for Thailand’s $10.3 billion government pension fund.

Citi global transaction services will provide Thailand's government pension fund with all of its payment needs under the terms of a new mandate from the fund, further confirming the bank's claim that its public sector cash management business is picking up.

When fully implemented, Citi will combine a myriad of its treasury offerings, including Paylink, automated clearing house, money order and real-time gross settlement capabilities, to handle payments between the $10.3 billion fund and its members and other government departments. The solution is fully automated, centralised and standardised.

"We selected Citi to be our main payment provider as they demonstrated an excellent understanding of GPF's [government pension fund] requirements and provided a tailor-made solution supported by their leading technology platform," said Sopawadee Lertmanaschai, secretary general of the fund, in a statement.

"Citi has a very large pipeline of public sector deals that has grown by over 80% in value year-on-year as we increase our focus in this client segment," said Sanjeev Jain, Asia-Pacific regional head of public sector in the bank's global transaction services division. "We are in ongoing discussions with numerous government and public agencies and hope to announce more mandates in the coming months."

Other recent public sector wins for the bank include a clearing and settlement mandate from Bursa Malaysia, a purchasing card solution for the Hong Kong government and solutions for India Post and the National Bank of Cambodia.

Citi has 10 people dedicated to its public sector transactions business in Asia with one person responsible for Thailand. The pension fund put out a request for proposals in mid-2009 and awarded the mandate to Citi in the first quarter of 2010.

In addition to the public sector win, Citi was also named Midea Electric Trading's global cash and trade bank covering 39 markets around the world last week. The solution will involve liquidity management for the Chinese white goods manufacturer that includes funds concentration into a single account and extending trade financing for the firm's trading activities.

"Midea Electric Trading continues to grow globally and efficient working capital management is key to the continuation of our expansion plans," said Davis Weng, head of Asean (Association of Southeast Asian Nations) treasury centre at Midea Electric (Singapore), in a statement. "We are pleased to partner with Citi to support our expanding business."

It is unclear whether the mandate replaces one Midea previously had with HSBC outside of China for local account opening, real-time global account monitoring and enquiry and priority payment procedures. In March 2009, Jevons Liang, then international settlement manager for Midea Group, said that the HSBC solution was needed for the "internationalisation" of the company.

Corporate mandates form the bulk of Citi's cash management business in Asia, but its public sector and bank services businesses are rapidly increasing in importance. Last autumn, the bank split the joint regional head of bank services and public sector role into two positions, appointing Sanjeev Jain regional head of public sector last December and Munir Nanji regional head of bank services in March. The move came after Francesco Vanni d'Archirafi, global head of Citi global transaction services, told FinanceAsia in a September 2009 interview that the public sector group was an important and growing client segment for the bank.

According to Jain, the bank's public sector revenues were up 40% year-on-year in the first quarter compared to the same period in 2009. Overall, transaction services revenue at Citi in Asia-Pacific rose 4% in the first quarter to $621 million compared to $598 million a year ago.

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