DBS Bank eyes revenue growth from cash-flow advisory service

DBS Bank, the largest lender in Southeast Asia by assets, is expecting robust revenue growth momentum in its global transaction banking business in the coming years on the back of a newly-launched advisory service designed to help corporate clients free up more capital in their cash-flow cycle.

There is a combined total of US$2.7 trillion of "trapped cash" in Asia, money that is not directly available to repay debt or to finance corporate operations, according to estimates by the Singapore-based lender.

Trapped cash is money that is legitimately earned, but is difficult to repatriate. It occurs as a result of a number of factors, including foreign-exchange controls, capital requirements, restrictions on inter-company lending, and taxation on cross-border flows.

The bank's "Working Capital Advisory Programme", launched in Singapore in March and in Hong Kong last Friday, can help corporate clients increase their cash flows by 20 per cent to 30 per cent, DBS said. It was the first such programme to be launched worldwide, the bank added.

"We are very optimistic based on the results of the pre-launch [of the programme] that we saw," said Sohfern Boey, managing director and head of global transaction services at DBS.

The programme involves benchmarking a client against a database of 65,000 companies to compare working capital ratios and cash conversion cycles.

DBS will then analyse client-specific data and provide insight and advice on best practices where firms could improve operations to release more cash.