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Cash Pooling

Consolidation and financing of accounts held by companies intra-group entities.

This service enables centralized management of cash balances for all accounts of a Group while securing payments of the pool participants via a Cash Pooling Agreement signed between the Pool Participants and the Head Company. This service is mostly appropriate for companies with a centralized financial strategy and a single control centre.

Material cash pooling is based on actual cash transfers between the accounts of the pool participants into one account (the Master Account), that is in turn used to secure payments by the pool participants. On a daily basis, cash balances are automatically transferred from the Pool participants' accounts into the Master account. If the pool participant’s account has insufficient balance for a payment, the Master Account may be used in order to make such payments as long as it matches pre-approved agreement criteria.

All cash flows between the Master account and pool participants are reported in daily statements.

Notional cash pooling allows mutualisation of cash balances and interest payments between the Pool Participants, without the necessity to have actual cash transfers.  Internal liquidity issues are addressed via compensation of interest expense.

On a daily basis, the liquidity position for all pool participants is calculated, i.e. calculation of total debit and credit balances in the pool participants’ accounts. Interest due by accounts in debit will be mutualised and deducted from interest paid to accounts in credit.