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Swedish CFOs downbeat on business opportunities - Industry roundup: 30 October

Swedish CFOs display downbeat view on business opportunities

Swedish CFOs’ views of business opportunities for the future have fallen to the lowest level since the global financial crisis 2009. Cost reductions have risen to the highest priority while economic growth is seen as the greatest risk, according to this autumn’s CFO Survey from Deloitte and SEB.

The proportion of CFOs who see favourable business opportunities in the coming six months has fallen in the autumn’s CFO Survey to 20% from 41% in the spring. This means that the indicator, or net balance between those who have a positive view and those who have a negative view, has fallen to minus 28 from plus 18 in the spring. This is both the lowest level and largest single change since the global financial crisis of 2008. This change is driven to a great extent by a major shift in the mood in the engineering industry, where 50% of CFOs in the sector see the situation as unfavourable while the corresponding figure in the spring was 15%.

Cost reductions are the highest priority for CFOs, compared with organic growth which ranked highest in the spring. 21% of CFOs give cost reduction as a priority. Ranked next highest are efforts to improve cash flow and organic growth.

Regarding risks, 55% of CFOs consider that economic growth is a significant risk for the next 12 months – an increase from 49% in the spring. This makes it the most significant risk followed by pressure on margins and prices and falling domestic demand.

The autumn survey also asked questions about companies’ use of generative AI. The result shows that an increasing number are beginning to actively experiment to form an opinion of the extent to which the organisation can benefit from AI. At the same time, a majority (85%) of companies see generative AI as currently not at all or only slightly important for their business and strategy. When CFOs were asked in what area generative AI might be useful, cost reduction, efficiency and growing margins were ranked highest – areas which were also in focus at previous technology shifts.

“The macro situation in autumn 2023 most closely resembles a balance scale where the central banks hold the weights and determine economic development,” commented Marcus Widén, economist at SEB. “The resistance previously seen during 2023 has now been replaced by a situation where economic activity increasingly differs between economies and regions. In Europe, activity is now slowing down in both manufacturing industry and the service sector, which is reflected in the results of this autumn’s CFO Survey.”


ECB survey makes limited revisions to headline inflation expectations 

In the ECB’s Survey of Professional Forecasters (SPF) for the fourth quarter of 2023, respondents made limited revisions to their expectations for headline inflation measured in terms of the Harmonised Index of Consumer Prices (HICP) for 2023 to 2025. Headline HICP inflation was expected to decline from 5.6% in 2023 to 2.7% in 2024 and 2.1% in 2025. Expectations for 2023 were revised upward by 0.1 percentage points, those for 2024 were unchanged, and those for 2025 were revised downward by 0.1 percentage points. The upward revisions in the short term reportedly reflected recent oil price developments. Core HICP inflation, which excludes energy and food, was revised downward for 2024, 2025 and the longer term. Longer-term expectations for headline HICP inflation were unchanged at 2.1%.

Expectations for real GDP growth were revised down slightly for 2023 and 2024. Respondents expected GDP growth of 0.5% in 2023, 0.9% in 2024 and 1.5% in 2025. The expectations for 2023 and 2024 were revised downward by 0.1 and 0.2 percentage points respectively, while expectations for 2025 were unchanged compared to the previous round. Respondents’ short-term GDP expectations imply a sluggish second half of 2023, with economic activity picking up over the first half of 2024.

The expected profile of the unemployment rate has been revised down slightly over the entire horizon by around 0.1 percentage points compared to the previous round. Respondents expected unemployment rates of 6.5%, 6.7% and 6.6% in 2023, 2024 and 2025 respectively. The longer-term expectation for the unemployment rate (2028) was 6.5%.


Migros upgrades to ION’s Wallstreet Suite solution 

Migros, Switzerland’s largest retail company, supermarket chain, and private employer, has successfully upgraded to ION’s new Wallstreet Suite solution deployed in the ION Cloud.

Wallstreet Suite, an enterprise-level treasury management system, is designed to handle complex treasury needs, while providing global visibility to cash, liquidity, and exposures. Its modular, service-oriented architecture aims to help finance teams achieve more through automation and exception management, making it possible to scale operations and bring greater visibility to the finance organisation.

Migros sought to improve automation and data visibility within their treasury processes. The business will benefit from a TMS user experience that equips users to monitor trades, bank statements, settlements, and statuses in real time with visual alerts. Migros also looked to advance their technology and reduce their total cost of ownership by migrating their operations to the ION Cloud. This should simplify Migros’ operations, reduce their costs, and increase their agility while improving the overall security and integration of the solution

“We upgraded to the new Wallstreet Suite to automate our business processes, improve data management, support our advanced reporting, and increase visibility to free up our treasurers’ time,” said Beda Ledergerber, Head of Treasury at Migros. “We will use Wallstreet Suite to centralise workflows, automate key processes like bank reporting and settlement, and provide easy component upgrades.”


BBVA Spark backs SCF fintech Twinco Capital with €50m debt

Supply chain fintech Twinco Capital has secured an additional €50m facility with BBVA Spark to accelerate growth. Twinco, one of the few European high-growth fintechs led by women, offers the first sustainable supply chain finance solution in the market that covers purchase order funding and has provided over US$250m in funding to suppliers in emerging markets.

“We are very pleased to support Sandra and Carmen, two entrepreneurs who, with Twinco, have reinvented the way supply chains are financed on a global scale and who have also incorporated innovative environmental and social criteria into their supplier financing model,” explained Roberto Albaladejo, head of BBVA Spark.

Twinco is a venture-backed business, with investors such as Quona Capital, Working Capital Fund, Mundi Ventures, Finch Capital. On the debt side, BBVA Spark will become one of Twinco’s key financial partners and joins EBN Banco de Negocios who has been supporting the company from its inception, and Zubi Capital.

Twinco Capital engages with large corporations - mostly in the retail and apparel sectors - and offers funding to their suppliers worldwide, advancing up to 60% of the purchase order value upfront and paying the remainder upon delivery. The process is designed to be a fully transparent, no-hassle experience that provides the suppliers with funding for its purchase orders within 48 hours. The key to its success is its unique risk model, which complements the traditional view of financial risk with business performance and ESG data. In other words, it uses machine learning to assess the quality and strength of the commercial relationships between these large buyers and their suppliers.


DBS launches financing solution to advance SME sustainability agendas

DBS has announced a hybrid financing solution to help small and medium enterprises (SMEs) access a wider pool of capital to finance their sustainability journeys. The DBS Eco Renovate Loan lets SMEs borrow up to 100% of the cost of using resource efficient or energy optimisation solutions for a green renovation, at preferential rates. Companies can also choose to bundle the loan with a traditional commercial loan to finance their total renovation needs.

The Eco Renovate Loan is structured in line with internationally recognised Green Loan Principles, and is the latest in a suite of financing solutions, including electric vehicle financing, sustainable trade financing and renewable energy financing, by DBS to help accelerate the adoption of sustainability solutions by SMEs.

Companies and contractors use a simplified checklist to identify, track, and implement sustainability-related initiatives in their renovation project. Companies must submit a pre-renovation checklist with supporting documents such as quotations, as well as invoices as proof of work done after the project is complete.

“SMEs are increasingly aware of the need to embed sustainable practices into their businesses, to better compete in a green economy,” commented Koh Kar Siong, Group Head of Corporate and SME Banking, DBS. “Yet, most sustainable financing initiatives are geared towards larger corporates as these companies have access to the data, resources and know-how to track and measure their progress. The Eco Renovate Loan aims to bridge this financing gap by offering SMEs a simple, effective solution to kickstart their sustainability journeys.”


SmartStream launches collateral management solution 

SmartStream has announced the launch of TLM Collateral Management, V.6. The firm says this release introduces an intuitive, and thin client user interface. It’s designed for users with different skill sets, including those who are less experienced in the collateral management operations area.

As volumes rise in collateral management, so do manual processes. Collateral experts are harder to train and retain, and it’s often difficult to offshore this process. The industry is seeking newer ways to tackle increased collateral call volumes, while reducing associated operational costs. 

TLM Collateral Management, V.6, aims to help organisations with data integrity and validation for all collateral management processing. Additionally, it will assist with the demands uniquely presented by T+1 settlement. Financial institutions must automate all aspects of their collateral management processes in a condensed time frame, including agreement, booking, substitutions and settlement notifications.

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