Relations with banks and insurance institutions

Ansaldo STS aims to create true partnerships with leading banks in order to optimise the support it receives in its business activities, which are developing in ever more far flung countries and which thus pose difficulties and unique aspects in relation to finance and banking.

 

As a result, the Company needs reliable banks, preferably with a local branch abroad, in order to support the various stages of the operating process, from assessing tenders to setting up local branches to finalise projects acquired.

Ansaldo STS’s strategy is therefore rooted in stable, well-established relations with banks, using a multi-product approach in order to avoid amassing specific businesses at one bank while simultaneously achieving cost efficiency.

Ansaldo STS has relationships with leading global banks, including: Intesa Sanpaolo, UniCredit, CitiGroup, ING, Credit Agricole, BNP Paribas, JP Morgan Chase, HSBC, Nordea, Saudi British bank, Riyad bank, Sumitomo, Bank of Tokyo, Mizuho Bank and Deutsche Bank. Its “primary” bank transactions relate to bank guarantees, bonds, project financing, documentary credits, treasury transactions, treasury management (liquidity, payment and collection management) and financial consultancy.

 

With a view to obtaining the utmost effectiveness from the partnership relationship, Ansaldo STS is aiming to standardise the consultation and discussion stage with all credit institutions as much as possible, both in terms of presenting projects and in terms of negotiating pricing and special terms and conditions for the financial instruments required.

Ansaldo STS is increasingly focused on obtaining structured and definitive technical feedback from its credit institutions, along with an indicative economic offer that makes it possible to compare the various solutions proposed.

 

Securities and bonds - types and amounts

Having recognised that the inability to obtain guarantees could prevent contracts from being clinched with customers, Ansaldo STS has negotiated a set amount of credit lines in order to support its bond and guarantee requirements and promote business growth.

In 2017 alone, the Company negotiated and obtained new credit lines for a total of EUR 863 million, which include the increase of existing lines with leading insurance companies in the US (Zurich and Chubb) for a total of around EUR 520 million.

In terms of percentage, over 50% of guarantees issued for Group companies are indirect, i.e. issued through banks and insurance companies in favour of the beneficiary. Advance payment bonds are an extremely useful and widespread guarantee instrument; these enable the customer to recover payments made in advance or on account should the supplier breach the terms of the contract.

As at 31 December 2017, guarantees amounted to approximately EUR 3.406 billion. The main issuers were:

  • 25 banks (about 36% of the guarantee amounts were used);
  • 14 insurance companies (approximately 25% of the guarantee amounts were used).