Corporate Finance Figures On The Up

The numbers are on the up this week! But don’t let that fool you. Rising corporate finance metrics don’t always mean good news. Find out which figures led to good growth — like digital corporate payments increases or a rise in SME hedging practices — and which signal bad news for corporate FinServ.

$99.9 trillion worth of payments passed over the U.K. CHAPS payment scheme in 2015, and the infrastructure is used primarily for corporate treasury payments, according to the latest data from UK Payment Markets 2016.The figure was provided by researchers examining the trends away from cash as businesses and consumers increasingly use cards. Direct debit cards are used by 85 percent of U.K. accountholders today, while the number of paper checks written last year declined by 13 percent compared to 2014 levels. But the massive volume in CHAPS corporate payments accounts for more than 90 percent of all payment types, researchers said.

$947 billion worth of corporate loans has been provided by Wells Fargo, a figure greater than loans financed by Bank of America or JPMorgan Chase. As Wells looks to continue increasing its corporate lending, reports have pointed out that the FI is ignoring regulatory guidance, which recommends that lenders don’t loan to businesses if the financing would push their corporate debt levels above six times their earnings. Wells told reporters that it has its own guidelines to asses whether it will lend to a business or not. “Regulators don’t make our loan decision for us,” the bank’s head of corporate and commercial banking and treasury management, Perry Pelos, told reporters.

$4.83 billion growth expected for the retail procurement space by 2021, said new analysis from Industrial Market Research last week. The rise in procure-to-pay technologies and increasing demand for heightened visibility, procurement data and strengthened communication between buyers and suppliers in the retail segment are all combining to boost the value of procurement solutions, researchers said. Procure-to-pay tools are expected to see greater market growth than comparable solutions, like supplier or contract management services, the report added, and North America is slated to remain the top revenue-generating geographical region this decade.

1.9 billion FleetCor transactions a year will move to IBM’s cloud thanks to a new agreement between the companies. While it’s sure to streamline FleetCor’s fleet card payments, the move also signals IBM’s confidence in the growth of FleetCor and the fleet payments space in general. According to reports, the company expects to surpass $1.7 billion in sales for FY 2016. In a statement, the company said it expects IBM to provide efficiencies in its processes moving forward. IBM reportedly beat out rivals Amazon, Google and Microsoft for the contract.

12 banks may have been impacted by SWIFT breaches, reports said last week, which is one number the financial services space does not want to see increase. Bangladesh Bank was previously thought to be the only bank effected, when cyberthieves stole $81 million by compromising the SWIFT software. FireEye, which is investigating the case, has been contacted by 11 more banks that reportedly found evidence that their own networks had been breached. The financial institutions are spread across Southeast Asia and New Zealand, reports added. The Brussels-based interbank cooperative, however, issued a statement noting that these concerns may turn out to be unrelated to the SWIFT hack.

10% more usage in Options signals a newfound interest among Australian SMEs for FX risk mitigation, found analysis from East & Partners. The research found that while a lack of understanding, education and experience in hedging generally prevents small businesses from using Options and Forwards to mitigate FX exposure, there has been an increase in participation in this space because of a dropping Australian dollar. Still, said East & Partners Head of Markets Analysis Martin Smith, “the overwhelming majority of SMEs are acutely unaware of the significant downside risk posed by a marginal rise in FX volatility,” accounting for the low instances of SME participation in hedging strategies.