Overview
- Analysis of Trafigura’s main banks’ economic profitability
- Optimization of cash management costs in Europe and in the US
Objectives
- To assess Trafigura’s banks’ economic return relative to their capital employed
- To ensure optimal business allocation among banks (i.e., a more accurate distribution of Trafigura’s wallet)
- To determine potential optimization areas on all banking products
- To monetize cash management optimization areas
Results
- RAROC analysis presentation encompassing global business with over 30 key banks across lending, trade finance, cash management, markets, etc.
- Detailed relative bank mapping, individual bank profitability analysis and ST lending optimization cost recommendations
- Improved visibility of bank costs, economic capital allocations and room to optimize
- Substantial savings/additional yield on cash management in Europe and the US
Methodology
- Comprehensive data collection; RAROC parameters calibration specific to Trafigura’s banking products; detailed RAROC calculation per product, per bank and comparative analysis
- Comprehensive bank cost analysis and optimization strategy design and recommendation
- Bilateral discussion coordination with banks
- Active process management until new pricing implementation
Value Added by Redbridge
- Proprietary tool developed over time across sectors and products allowing a precise RAROC calculation
- Unique global database of bank service costs enabling comprehensive benchmark by country, product, etc.
- In-depth knowledge of bank fee structure and related practices in both Europe and the US
- Objective analysis of bank offers and efficient bank negotiation based on existing best market practice