Commercial Banking - HSBC Bank Malta · PDF fileRenminbi (RMB) HSBC Bank Malta p.l.c. offers a full service proposition in Chinese Renminbi including International RMB Business Accounts

Business Internet Banking

Convenient, secure and simple 24/7 banking.

Business Telephone Banking

The simple and secure way to conduct your business financial needs over the phone.

Business start up

Starting a business is one of the most important things you will ever do in your life and one that is worth taking the time to get right, right from the start. As bankers we cannot possibly know as much about your business as you do. But we do know how to provide a banking service that’s personal to you. That’s because we understand the financial needs of businesses. So our aim is to provide the support you need for your business, when you need it.

Corporate

HSBC Corporate Banking can equip your business to meet the challenges and realise opportunities, now and in the future. You will have access to a wealth of financial expertise and specialists, innovative products and services, and our global presence. By working alongside

your business, our experienced Relationship Managers can respond to, and anticipate your needs.

International

With HSBC, you gain access to our global network of more than 6,500 business experts, spread across 65 countries. It means more than just experience and knowledge, it means real local insight and understanding. Just tell us your ideas and needs and we will guide you towards realising them with proactive advice and personal support.

Trade and supply chain

The choice of a trade services provider is vital in a world where both speed and attention to detail are crucial and where you need a partner who can seamlessly combine local service excellence with global reach.

Commercial BankingThis could be the right solution for you

REQ NO: 75721DATED: 16/10/12SPECS: Fact SheetACC. EXEC: RamonDESIGNER: CAPROOF: 3 PROOF DATE: 18/10/12

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Renminbi (RMB)

HSBC Bank Malta p.l.c. offers a full service proposition in Chinese Renminbi including International RMB Business Accounts domiciled in Malta, Direct Payment capability, Trade Finance related services i.e. Documentary Credits, Collections, Gurarantees, Foreign Exchange Transacting and Risk Management.

Invoice Finance

Achieving an effective cash flow is essential to the success of your business particularly if you sell on trade credit terms, whilst chasing payment wastes valuable time and resources that could be profitably employed elsewhere.

Risk Management

Are you involved in importing, or exporting? Do you have investments or liabilities abroad? If so, you are likely to be involved in some form of foreign exchange risk. Our dedicated Global Markets Team can help you minimise these risks and make sure your money works harder for you.

EPOS and eCommerce

Receiving the proceeds from the sale of goods and services securely and efficiently is fundamentally important for your business in order to improve cash flow and utilise financial resources to the optimum.

Business Overdraft

Our Business Overdraft is a simple, cost-effective way to meet your working capital requirements and get extra cash when you need it.

Term Loan

A Term Loan allows you to invest larger amounts in your business whilst controlling the effect on your cash flow.

Commercial Property Loan

The Commercial Property Loan is a simple, cost-effective way of raising finance to purchase business premises.

Negozju Card

Our Negozju Cards have been purposely designed for Businesses like yours and give you immediate and easy access to your money.

Green Loans

Our unsecured Green Loan is your ideal solution to finance a range of environmentally friendly initiatives and energy saving products.

Cash and Cheque deposits

The success of any business lies in making good use of funds. If your business generates cheques and large amounts of notes and coins it is important for you to get this money into your account as quickly as possible and in a secure way.

Business Current Account

Our Business Current Account is a basic requirement for every business, allowing you to make and receive payments by cash, cheque or electronic means.

Business Savings Account

Our Business Savings Account could be the right solution for you if you have surplus funds or business savings.

Term Deposit Account

Our Business Term Deposit Account could be the right solution for you if you want to earn top rates of interest on your business savings with the security of a fixed interest rate.

Foreign Currency Account

Our Business Foreign Currency Account could be the right solution for you if you need a bank account because you trade with customers and suppliers in other countries using other currencies.

Direct Debit

Payment by Direct Debit is an inexpensive and efficient way of collecting periodic payments from your various customers in respect of e.g. subscriptions, insurance policies, while improving your cash flow as you will have full control over payments due from your customers.

Direct Credit

Payment by Direct Credit is an inexpensive and efficient way of making payments to various beneficiaries in respect of e.g. salaries and settlement of bills for payments and services, while reducing your administrative costs in issuing cheques.

Inward payments

In your line of business you may receive payments from both local and overseas business partners, in local and other currencies. In these circumstances, the success of your business will depend on how timely these payments are credited to your account.

Outward payments

Whatever the size of your business you will always need to make payments either locally or overseas. The execution of timely payments plays an important role in the success of your business.

Foreign cheque collection/negotiation

In your business you may receive payment by foreign cheques in euro and other currencies that are payable outside Malta, which you need to credit into your account.

Contact points

For further information please contact our Business Banking Direct on 2380 8000 to discuss your requirements. You can also visit our website www.hsbc.com.mt/commercialbanking.

Our lines are open from 8.00am to 5.00pm Monday to Friday (excluding public holidays).

Approved and issued by HSBC Bank Malta p.l.c., 116, Archbishop Street, Valletta VLT1444 HSBC Bank Malta p.l.c. is licensed by the MFSA to conduct investment services business and is enrolled as a tied insurance intermediary of HSBC Life Assurance (Malta) Ltd. 75721-10/2012

Your needs

This is the solution for you if:• You are willing to export without a DC, but wish

to reduce the risk of non-payment by controlling commercial documents via bank channels.

• Your buyer is unwilling or unable to issue a DC.• You need a trusted partner to process documents

quickly and help resolve payment problems.• You need the flexibility to provide credit terms to your

buyer, but wish to strengthen your right of recourse in the event of non-payment through a bill of exchange (commonly known as a draft accepted by your buyer).

Product features

• Documents and payment processing under international rules. Collections help protect buyers and sellers with terms subject to international rules and regulations*.

• Documents handled via banks. Commercial documents and trade proceeds are processed via the buyer’s and seller’s banks while goods are shipped. Your buyer has the security of knowing that goods have arrived before paying or accepting a future-dated draft, while you retain control of commercial documents until your buyer pays or accepts obligation to pay.

• Two collection methods. HSBC offers two common documentary collection methods, giving you peace of mind while helping to reduce costs. They include:• Documents against Payment (D/P):

Commercial documents are released against payment by the buyer, either at the time documents are presented or at a future date specified in the draft.

• Documents against Acceptance (D/A): Commercial documents are released against the importer’s acceptance of future-dated drafts.

• One collection – one bank. If your buyer uses HSBC to handle the import side of the transaction, you may benefit from faster processing and issue resolution in the event of a dispute.

Solutions for Exporters

Export Documentary Collection SolutionReliable and cost-effective payment collection while maintaining control over goods

Selling products globally can increase opportunities but the consequences can be unpredictable, especially in unfamiliar markets. HSBC’s Export Documentary Collection Solution is a simple, cost-effective and secure means of trading internationally – reducing the risk of non-payment by your buyer while giving you the ability to maintain control over commercial documents.


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* HSBC handles collections in accordance with the Uniform Rules for Collection (ICC Publication No.522), a set of international standards for the handling of collections through financial institutions. The rules are published by the International Chamber of Commerce (ICC).

HSBC has sole discretion to make funding decisions for individual transactions and will retain recourse to you after funds are advanced. An HSBC trade account relationship, approved trade-finance facilities and trade-finance agreement are required. Additional terms and conditions may apply. Trade and supply chain transactions may be subject to credit approval. Other restrictions, including specific country regulations, may apply. Foreign currency exchange rates may apply to certain trade transactions. Certain products and solutions contained herein may not be offered in every market. Check with your local HSBC Trade and Supply Chain specialist for a full product offering in your country.

Approved and issued by HSBC Bank Malta p.l.c., 116, Archbishop Street, Valletta VLT1444 HSBC Bank Malta p.l.c. is licensed by the MFSA to conduct investment services business and is enrolled as a tied insurance intermediary of HSBC Life Assurance (Malta) Ltd.

The products and services mentioned herein are only available in jurisdictions where the respective issuers are authorised to operate and the material is not intended for use by persons located in or resident in jurisdictions which restrict the distribution of this material.

Copyright HSBC Holdings plc 2009. All rights reserved. 75721-10/2012

Benefits to you

• Control title to goods and payment terms. Specify when title to goods should be released to your buyer – at payment or at your buyer’s acceptance of the bills.

• Negotiate better terms and prices. Documentary collections, as opposed to documentary credits (DC), are generally faster and less expensive for your buyer, giving you additional leverage to negotiate better terms.

• Work with a trusted partner in new markets. HSBC will often be able to act on the import, as well as export, side of the collection due to our global branch network – providing you with fast, efficient processing and problem resolution.

Documentary Collection versus DC

While a collection can provide more protection when compared to trading under open account terms, it can involve more risk than a DC transaction. Keep in mind that under a collection:

• Your bank and your buyer’s bank do not guarantee payment. If your buyer does not pay, you may have difficulty enforcing the contract and may have to sell goods at auction or pay for goods to be shipped back. You should always verify your buyer’s credit status and reputation before agreeing to an export documentary collection.

• Only reputable transport companies should be used for shipment of goods.

Related products

• Post-Shipment Finance. Provides funds on presentation of your collection documents subject to approved credit facilities being in place.

• Pre-Shipment Finance. Provides advances to you against purchase orders confirmed by your buyer. Approved Manufacturer’s Advance and/or Packing Credit facilities are required.

• Pre-Set Exchange Rates and Forward Contracts/ Options. Protect your business against future currency fluctuations by fixing an exchange rate upfront.

Contact points

For further information please contact your HSBC Relationship Manager or Trade and Supply Chain specialist today.

If you do not have a Relationship Manager, or are not an HSBC customer, call us on 2380 1843 during office hours or contact Business Banking Direct on 2380 8000 from 8.00am to 5.00pm Monday to Friday (excluding public holidays). Alternatively you may visit www.hsbc.com.mt/commercialbanking

Trade and Supply Chain HSBC Bank Malta p.l.c. Business Banking Centre 80 Mill Street, Qormi QRM 3101 Malta

How it works

The diagram below illustrates the process flow of a typical documentary collection using D/A method:

Your needs

This is the solution for you if:• You are not familiar with the DC-issuing bank and its

ability to make payment.

• You are concerned that political factors in your buyer’s country, such as the government imposing currency controls or expropriating bank assets could lead to non-payment under the DC.

• You have entered into a DC transaction that represents a substantial portion of your sales and are concerned about the impact on your business should the issuing bank be unable to make payment.

Product features

• Payment assurance. HSBC’s undertaking to pay when confirming a DC is subject to the Uniform Customs and Practice (UCP) rules published by the International Chamber of Commerce. The undertaking is conditional on your presentation of documents that comply with the terms and conditions of the DC.

• Confirmation of DCs issued by other banks and by HSBC. Your local HSBC office can add confirmation to DCs issued by other banks to mitigate the counterparty and country risk associated with these transactions. You may also request your local office to add confirmation to DCs issued by HSBC in other countries to mitigate the country risk associated with these transactions. Confirmation charges will apply.

• Non-compliant documents. HSBC’s confirmation will cease immediately if non-compliant documents are presented. However, subject to acceptance of the documents by the DC-issuing bank, HSBC may, upon request, reinstate its undertaking to pay at its sole discretion. Additional fees and conditions may apply.

• Financing under confirmed DCs. You can access funding on presentation of compliant documents by requesting that HSBC discount your export bills under confirmed DCs*.


Export Documentary Credit ConfirmationAdditional payment assurance when trading under DC terms

Selling products globally can increase opportunities but the consequences can be unpredictable, especially in unfamiliar markets. With HSBC’s confirmation added to a documentary credit (DC), you know that HSBC will undertake to pay on a limited recourse basis* against presentation of compliant documents, allowing you to trade in new markets with greater confidence.


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* HSBC handles DC transactions in accordance with the Uniform Customs and Practice for Documentary Credits (UCP), a set of international standards for the handling of Documentary Credits through financial institutions. The rules are published by the International Chamber of Commerce (ICC).

Trade and supply chain transactions may be subject to credit approval. Other restrictions, including specific country regulations, may apply. Foreign currency exchange rates may apply to certain trade transactions. Certain products and solutions contained herein may not be offered in every market. Check with your local HSBC Trade and Supply Chain specialist for a full product offering in your country.




Benefits to you

• Greater flexibility to increase sales. Expand your sales to new customers in new markets with added payment assurance.

• Manage counterparty and country exposure. Minimise your risk of loss due to exposure to a specific issuing bank or country with the added assurance of HSBC’s conditional undertaking to pay.

• Additional assurance before starting production. Ask HSBC to add confirmation to a DC as soon as it has been issued and advised to you.

• One-stop shop. HSBC’s unparalleled international standing, global network and risk management expertise allow us to provide a one-stop DC confirmation service for a wide range of banks in many countries.

How it works

Your Export DC Confirmation is handled through the following steps:

1 You ask your buyer to instruct his or her bank (the DC-issuing bank) to:

• ensure the DC terms call for confirmation to be added, and

• advise the DC through HSBC.

2 Upon receipt of the DC, HSBC will contact you to advise if confirmation is possible and, if so, will quote a confirmation fee for your acceptance.

3 You present documents to HSBC. If the documents are compliant with the terms of the DC, HSBC can either provide upfront funding to you by purchasing your export bills, or alternatively, can send them for approval and payment.*

Related products

• Comprehensive Export DC solutions. Delivered by HSBC’s team of trusted financial professionals to efficiently handle your international transactions.

• Pre-set exchange rates and forward contracts/options. Protect your business against future currency fluctuations by fixing an exchange rate upfront.

Contact points




Benefits to you

• Reduce the risk of non-payment by your buyer through the issuance of a DC by your buyer’s bank. By issuing a DC, your buyer’s bank undertakes to pay at a set date upon presentation of export documents that comply with the terms and conditions of the DC.

• Access funds after shipment. You may be able to obtain funds without the need to draw down on your credit facilities by presenting compliant documents to HSBC. If documents do not comply with the DC, funds can be advanced upon acceptance of documents by the DC-issuing bank.

• Trade with confidence by mitigating the risks of non-compliant documents. If documents are not in compliance with the terms of the DC, the DC-issuing bank is not obligated to pay unless your buyer accepts the discrepancies. HSBC’s reputation for providing superior standards of service relating to document checking and handling may help mitigate the risk of non-compliant documents being presented to the issuing bank.

Product features

• Advising. Once transmitted by the issuing bank, HSBC will advise the export DC to you.

• Export bill handling and funding. Your documents can be sent to the DC-issuing bank for acceptance and payment, or you may request upfront funding. Funds can generally be advanced under clean documents or, if documents are discrepant, after acceptance from the DC-issuing bank has been received.

• Documents and payment processing under international rules. Trading under DC terms helps protect buyers and sellers because document handling is subject to international rules and regulations*.

• One DC – one bank. If your buyer issues the DC through HSBC, you may benefit from faster processing. Should a dispute with your counterparty arise, having the same bank on both sides helps resolve issues more quickly, saving you time and cost.


Export Documentary Credit SolutionAccelerated receivables, reduced risk

Grow your international sales with added payment assurance

Selling products globally can increase opportunities but the consequences can be unpredictable, especially in unfamiliarmarkets. With HSBC’s Export Documentary Credit (DC) Solution, you enjoy greater payment assurance under the DC and benefit from greater visibility and control with access to a comprehensive suite of processing and payment services.


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How it works

The diagram below illustrates the process flow of a typical DC transaction:


HSBC has sole discretion to make funding decisions for individual transactions and will retain recourse to you after funds are advanced. An HSBC trade account relationship, approved trade-finance facilities and trade-finance agreement are required. Additional terms and conditions may apply.





Your needs

This is the solution for you if:• You want additional assurance of payment from your

buyer before starting work or shipping an order.

• Your buyer has requested extended credit terms, but you need to access funds immediately after shipment without having to draw down on your credit facilities.

• You need a trusted financial partner to help you receive payment quickly while minimising the risk of nonacceptance of documents by the DC-issuing bank.

Related products

• DC Confirmation. HSBC can provide exporters with greater peace of mind by adding a conditional undertaking to pay against presentation of compliant documents, allowing you to trade in new markets with greater confidence. All confirmation requests are subject to HSBC’s sole discretion.

• Post-shipment finance of discrepant documents. If you need cash immediately after shipment and have presented discrepant documents, you may request funds to be advanced against your signed indemnity subject to approved facilities being in place.

• Pre-shipment finance. Access funds before shipment to produce, pack and ship your goods.


Contact points




Your needs

This is the solution for you if:• You have signed a contract with a buyer to supply

goods, but you are not able to fulfill the obligations in part or in full. You need a mechanism to transfer your rights and obligations to multiple suppliers/parties while ensuring that the requirements under the original contract are fulfilled.

• Your suppliers demand a DC, but you do not want to tie up your existing banking facilities or are not in a position to establish import facilities.

• You need to protect your position when you transfer your rights and obligations to a third party. This product can help you avoid revealing the identity of your ultimate supplier to your buyer as well as your profit margin from the transaction.

• You wish to retain control of goods throughout the transaction.

Product features

• Transfer to one or more suppliers**. A transferable DC can be transferred in full or in part to one or more second beneficiaries (suppliers) with or without substitution of invoices. The terms of a DC transfer prevent second beneficiaries from transferring the DCs onto third beneficiaries.

• Flexibility to substitute drafts. You may choose to substitute the drafts and invoices of the second beneficiary with your own when collecting payment. Under a full transfer without substitution, you do not need to present your own invoices/draft. The ultimate supplier may present documents directly to the issuing bank via his/her own bankers.

• Transfer options. When affecting a transfer, the DC must be transferred on the same terms and conditions. However, you have the flexibility to reduce or curtail one or more of the following five elements of the DC to reflect the terms of your contract with your supplier(s): • Amount of the DC • Price/quantity of units/goods • Expiry date • Presentation period • Shipment period/latest shipment date

In addition, the insurance cover as a percentage of the value of goods shipped by your suppliers can be increased.

Agents Solutions for Sourcing, Buying Offices and Traders

Export Documentary Credit TransferSupports the special role you play in the world of trade services

Sourcing products globally can increase opportunities but the consequences can be unpredictable, especially in unfamiliar markets. With HSBC’s Export Documentary Credit (DC) Transfer Solution, you can provide greater payment assurance to your suppliers using your buyer’s original DC without the need to separately issue a DC under your own credit lines*. Plus, you can benefit from greater visibility and control with access to HSBC’s comprehensive suite of processing and payment services.


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* HSBC handles DC transactions in accordance with the Uniform Customs and Practice for Documentary Credits (UCP), a set of international standards for the handling of Documentary Credits through financial institutions. The rules are published by the International Chamber of Commerce (ICC). The original DC should state that it is issued as an “Irrevocable Transferable”DC and HSBC should be nominated as the DC transferring bank.** If the DC is to be transferred to more than one second beneficiary it must state that partial shipments are allowed. In addition, if it calls for shipment by instalments, the text of the original DC must state that Article 32 of UCP 600 does not apply.





Benefits to you

• Credit facilities not required. By opting for an export transferable DC to be issued in your favour, you can transfer the credit to your supplier without the need for credit facilities.

• Confidentiality. Where required, you can substitute the drafts and invoices presented by the supplier with your own when presenting documents under the master credit, thus keeping your profit margin confidential from your ultimate importer/buyer.

• Multiple suppliers. You have the option to transfer the DC to more than one supplier/beneficiary.

• Obligation upheld. You are able to satisfy the terms of the contract with your buyer although you are not in a position to directly manufacture/supply the goods and services.

Risk characteristics

Before transferring a DC, you should be aware of the following:• Non-performance by the second beneficiary will

prevent you from receiving payment for your portion under the master DC.

• The transferring bank has the right to send all of the second beneficiary’s documents, including invoices and/or draft(s), to the issuing bank should you fail to substitute conforming documents on first demand, without further responsibility to you as the first beneficiary.

Related products

• Pre-set Exchange Rates and Forward Contracts/Options. Protects your business against future currency fluctuations by fixing an exchange rate upfront.

Contact points




How it works

The diagram below illustrates the process flow of a typical transferable DC transaction:


Export Finance SolutionUnlock your working capital with tailored financing solutions

Your needs

This is the solution for you if:

• You need funds to pay your suppliers and other expenses, but will not receive sales proceeds until later.

• You need greater financial flexibility to sell to new customers in new markets who demand credit terms.

• You need a financial professional to advise on your company’s financial needs.

Product features

Funding options customised to your working capital needs. A variety of export financing options are available for documentary credit (DC), documentary collection and open account transactions. They include:

• Post-shipment finance. Funds may be advanced upon presentation of export documents to HSBC, enabling you to realise cash after shipment.

• Bills under DC may be discounted without the need to draw down on your facilities if documents are presented in compliance with the terms of the DC. Non-compliant bills may be financed against your signed indemnity subject to approved facilities being in place.

• Documentary collection bills may be discounted on presentation of export documents.

• Open account bills can be financed upon presentation of your invoices and evidence of shipment.

• Pre-shipment finance for DC and non-DC collection transactions. Obtain financing to buy raw materials, manufacture goods and pack them pending shipment against presentation of a DC or purchase order from your buyer subject to the terms of your facility. A pre-shipment advance will be repaid from the proceeds of post-shipment finance after export documents are presented to HSBC.

Flexible terms

The following additional features apply to most types of export finance:

• Finance repayment terms tailored to your trading cycle.

• Straightforward drawdown process for individual transactions.

• Availability of foreign currency funding*

HSBC’s Pre-Shipment & Post-Shipment Financing Solutions offer working capital to help you fulfill your orders, enabling you to offer more competitive terms to trading partners.


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How it works

The diagram below illustrates the typical process flow of both pre-shipment (step 2 ) and post-shipment (step 4 ) finance

* Not all currencies may be available. Please contact HSBC for more information.






Benefits to you

• Win new business. Combine the flexibility to offer longer payment terms to your buyers with the ability to access cash upfront to pay your expenses.

• Negotiate better terms and pricing with your suppliers with the ability to make timely payments.

• Take advantage of the availability of foreign currency funding to secure interest rates applicable to those currencies if favourable to you.*

• Benefit from HSBC’s team of financial professionals who will work to understand your company’s financial needs in order to structure an appropriate funding solution that lets you concentrate on growing your business.

Related products

• Comprehensive Export DC and Documentary Collection solutions are delivered by HSBC’s team of trusted financial professionals to efficiently handle your international transactions.

• Red Clause Credit DCs contain a special clause authorising the advising bank to grant an advance to you before presentation of documents without the need to draw down on your facilities. The clause must be inserted by the DC-issuing bank.

• Pre-set exchange rates and forward contracts/ options. Protects your business against future currency fluctuations by fixing an exchange rate upfront.

• Guarantees and standby letters of credits. HSBC provides a range of guarantees, bonds and standbys that may advance the competitive power of your business. HSBC’s geographical reach means that we have experts on the ground ready to deliver support, whether you need bid bonds, advance payment guarantees or standbys issued for commercial or statutory requirements.

Contact points



Trade and Supply Chain HSBC Bank Malta p.l.c., Business Banking Centre 80 Mill Street, Qormi QRM 3101 Malta

Guarantees andStandby CreditsComprehensive global solutions for your business


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Payment assurancefrom a world-classfinancial institutionHSBC provides a range of guarantees, bonds and standbys that may advance the competitive power of your business. HSBC’s geographical reach means that we have experts on the ground ready to deliver support, whether you need bid bonds, advance payment guarantees or standbys issued, for commercial or statutory requirements.

Your needs

Guarantees and Standby Credits may be the right solution for your business if you:

• Want to expand your field of commercial activities

• Are looking to enter new geographical markets

• Aim to reduce the risks of your international operations

• Need to improve your cash flow management

• Want to continue to trade on open account terms

• Need to build a good relationship with the beneficiary

• Want to give your beneficiary assurance from a world-class financial institution.

Product features

• The most common types of guarantees are:

• Commercial - Tender/Bid, Performance, Retention, etc

• Financial - Supporting banking facilities etc.

• Guarantee text can be negotiated between the applicant (you) and the beneficiary (your customer), subject to acceptability by us.

• Guarantees can be issued either directly to the beneficiary on HSBC headed paper or indirectly through the HSBC Group offices.

Benefits to You

• Accelerate expansion into new markets

• Helps facilitate open account trade

• Provides security to the counterparty by a reputable bank

• Flexibility to participate in any kind of legal contract locally or internationally

Key Facts: Guarantees and Standby CreditsAlthough Guarantees and Standby Credits are similar, there are key differences between the two solutions:

• Some countries, like the US, exclusively issue only Standby Credits.

• Standby Credits expire on their specified date unless extended, while in some markets Guarantees continue to be valid beyond their expiry date and can only expire on return of the original Guarantee document.

• Guarantees may be subject to the “ICC Uniform Rules for Demand Guarantees 758 (2010 Revision)” while Standby Credits are subject to the “International Standby Practices ISP 98, ICC Publication No.590” or the “Uniform Customs and Practice for Documentary Credits (2007 Revision) ICC Publication No 600”.

• A Guarantee can also be subject to the specific governing laws of the country of the applicant or beneficiary.

Types of guarantees• Tender Guarantees/Bid Bonds

This bond is often required to support contract tenders, particularly in international trade situations. The bond can be claimed by the beneficiary if the applicant fails to fulfill the tender conditions.

• Advance Payment Guarantees This guarantee is used where the applicant receives an advanced payment at an early stage of the contract. The beneficiary can recover the amount paid, or a part thereof, if the applicant fails to fulfil their underlying contractual obligations.

• Performance Bonds A common type of guarantee that supports the applicant’s obligation under the contract and can be claimed in the event of non-performance or non-delivery.

• Retention Money Guarantees Contracts may allow the beneficiary to retain a proportion of the contract payment until substantial completion of the contract has taken place. The beneficiary may be prepared to release this retention money to the applicant against the presentation of a guarantee.

• Payment/Obligation Guarantee This guarantee is often used to cover the non-payment of debt(s) arising over a period of time. It provides financial security to the beneficiary should the applicant fail to make payment for the goods or services supplied.

• Financial Guarantee A common type of guarantee issued to support various kinds of financial obligations of the applicant. It allows the beneficiary to claim upon non-payment of monies. For example; guarantees in support of Banking facilities.

Risk CharacteristicsGuarantees are an independent instrument from the underlying transaction / contract(s) / performance being guaranteed. You can take additional steps to enhance protection by:

• Verifying the beneficiary’s reputation and track record

• Ensuring that the text of the guarantee is unambiguous

• Ensuring that the issuing bank has a good credit rating

Note: Independent legal advice should be sought if you are unsure of any terms of the bank guarantees and standby credits or whether it meets with your individual requirements.




Why choose HSBC?

Our experience servicing clients large and small, our market knowledge, geographic presence and innovative solutions are unsurpassed. Whether you are a small-to-medium size enterprise or a multinational corporation, HSBC is committed to supporting the entire transaction cycle of your business. When it comes to trade and supply chain, HSBC is your banking partner of choice.

Globally

Internationally, HSBC has over 9500 offices in 86 countries and territories. As “The world’s local bank”, we have the global coverage and local capabilities to provide you with innovative trade and supply chain solutions tailored to your needs.

Contact points




Sourcing products globally can increase opportunities but the consequences can be unpredictable, especially in unfamiliar markets. By issuing a Documentary Credit (DC), HSBC will undertake, on your behalf, to make payment to your supplier against presentation of compliant documents within the validity of the credit. You benefit from greater visibility and control with access to a comprehensive suite of services that make transactions happen at the speed of your business.

Your needs

This is the solution for you if:• You do not want to make payment without evidence

that your supplier has shipped goods and submitted documents specified by you.

• Your supplier wants payment assurance from a world-class financial institution.

• Your supplier needs additional assurance of payment before shipping goods.

Product features

• Additional payment assurance for your supplier. By issuing a DC, your bank undertakes on your behalf to make payment to your supplier against presentation of compliant documents within the validity of the credit.

• Full range of services. Take advantage of DC issuance and import DC bill processing, plus a range of related products, to fulfill your trade requirements end-to-end.

• Documents and payment processing under international rules. Trading under DC terms helps protect buyers and sellers because document handling is subject to international rules and regulations*.

• Different methods of payment. The terms of a DC can specify payment at sight or at a future date to accommodate the credit terms agreed with your suppliers.

• Variety of DC types to suit your business needs. Common types of DCs available include:

• Transferable and Back-to-back DCs, which enable your supplier or agent to leverage the strength of your DC when purchasing from their suppliers.

• Revolving DCs, which provide you with additional flexibility to accommodate multiple future shipments from your suppliers.

Solutions for Importers

Import Documentary Credit SolutionComprehensive DC-issuance solution your suppliers will trust


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HSBC has sole discretion to make funding decisions for individual transactions and will retain recourse to you after funds are advanced. An HSBC trade account relationship, approved trade-finance facilities and trade-finance agreement are required. Additional terms and conditions may apply. Trade and supply chain transactions may be subject to credit approval. Other restrictions, including specific country regulations, may apply. Foreign currency exchange rates may apply to certain trade transactions. Certain products and solutions contained herein may not be offered in every market. Check with your local HSBCTrade and Supply Chain specialist for a full product offering in your country.




Benefits to you

• New market opportunities. Payment will only be made if your supplier has complied with all the terms and conditions prescribed in the DC. As a result, a DC can help you expand your business and deal with new business partners in unfamiliar territories.

• Potential to improve pricing and terms. A DC issued by HSBC provides additional assurance to your suppliers, giving you additional leverage to negotiate more favourable pricing and longer payment terms.

• Accelerated cash flow. You can accelerate your cash flow by using DCs in place of deposits, and/or advances financed by import loans, overdrafts or your own cash reserves.

• Control over payment. Payment to your suppliers will only be made upon presentation of the required compliant documents within the validity of the credit.

Risk characteristics

Under a DC, you are obligated to pay if the supplier presents compliant documents, even if the goods are damaged or do not meet your expectations. You can take additional steps to enhance protection by:

• Verifying the supplier’s reputation, financial standing and ability to produce the goods required; and obtaining samples of goods.

• Ensuring your DC calls for a certificate of inspection issued by an independent inspection agency, showing a report of ‘clean findings’ certifying that goods meet the standard as clearly defined by criteria set out.

Related products

• Full cash-backed Documentary Credit. Quickly and easily issue a DC by paying cash upfront without establishing formal credit facilities.

• Import finance. Obtain funding against your future sales to pay your suppliers upfront.

• Shipping guarantee/delivery order/air waybill release. Allows you to take control of goods without presenting an original copy of transport documents when goods arrive before the documents, thereby avoiding additional storage fees or demurrage charges.


Contact points




How it works

The diagram below illustrates the process flow of a typical DC transaction:


Import Documentary Collection SolutionReliable and cost-effective payment to your suppliers

Sourcing products globally can increase opportunities but the consequences can be unpredictable, especially in unfamiliar markets. HSBC’s Import Documentary Collection Solution is a simple, cost-effective and secure means of trading internationally, that allows you to inspect commercial documents before making payment.

Your needs

This is the solution for you if:• You would like to import goods without paying cash in

advance or using credit facilities.

• You would like to strike a balance between your need to ensure goods are shipped in accordance with your requirements and your supplier’s need to ensure payment is received.

Product features

• Documents processing under international rules. Collections help protect buyers and suppliers with terms subject to international rules and regulations*.

• Documents handled via banks. Under a collection, documents and payment are processed via your bank and your supplier’s bank. You have the security of knowing that goods have been shipped before making payment, while your supplier can retain control of commercial documents until you fulfill the terms of the collection.

• Two collection methods. HSBC offers two common documentary collection methods, giving you peace of mind while helping to reduce costs. They include:

• Documents against Payment (D/P): Commercial documents are released against payment by the buyer, either at the time documents are presented or at a future date specified in the draft.

• Documents against Acceptance (D/A): Commercial documents are released against the importer’s acceptance of future-dated drafts.

• One collection – one bank. If your supplier uses HSBC on the export side of the transaction, you may benefit from faster issue resolution in the event of a dispute.


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* HSBC handles collections in accordance with the Uniform Rules for Collection (ICC Publication No. 522), a set of international standards for the handling of collections through financial institutions. The rules are published by the International Chamber of Commerce (ICC).




The products and services mentioned herein are only available in jurisdictions where the respective issuers are authorised to operate and the material is notintended for use by persons located in or resident in jurisdictions which restrict the distribution of this material.

Copyright HSBC Holdings plc 2009. All rights reserved 75721-10/2012

Benefits to you

• Simple and cost effective. An import documentary collection is generally faster, simpler and more cost effective than issuing a documentary credit (DC).

• Additional payment control. In contrast to paying your supplier in advance of receiving goods, an import collection allows you to inspect commercial documents before making payment or agreeing to pay at a fixed future date.

• Flexibility. Under an import collection, you have the flexibility to easily change contract terms on shipping, delivery and insurance right up until goods are shipped.

• Improved cash flow. Collections can improve your cash flow by giving you the flexibility to negotiate credit terms with your seller. Moreover, you do not need to place a deposit or use bank facilities, which are required under an import DC.

Related products

• Import finance. Obtain funding against your future sales to pay your suppliers upfront.

• Shipping guarantee/delivery order/air waybill release. Allows you to take control of the goods without presenting an original copy of the transport documents when goods arrive before the documents, thereby avoiding additional storage fees or demurrage charges.


Contact points




How it works

The diagram below illustrates the process flow of a typical documentary collection using D/A method:

Your needs

This is the solution for you if

• Your business needs additional funds to grow, but your suppliers are unwilling to extend credit terms and your buyers require credit.

• You need greater flexibility to source in new markets from new suppliers that may not be willing to extend payment terms.

Product features

• Funding options customised to accommodate your trading practice. A variety of import financing options are available for documentary credit (DC), documentary collection and open account transactions.

• Flexible terms.

The following options are avaliable with import finance:

• Finance repayment terms tailored to your trading cycle.

• Import finance that can be easily drawn down against individual transactions.

Benefits to you

• Make timely payments to suppliers. Import finance solutions help you make payment to your suppliers before receiving payment from your buyers, enhancing buyer-supplier relationships.

• Negotiate better terms with your suppliers. With additional financial flexibility to make timely payment, you are positioned to negotiate better prices with your suppliers in lieu of credit terms.

• Improve cash flow. Periods of extended credit provide time to sell goods before repayment and unlock funds to be used elsewhere in your business.

• Benefit from HSBC’s team of financial professionals who will work to understand your company’s financial needs in order to structure an appropriate funding solution so that you can concentrate on growing your business.

HSBC’s tailored Import Finance Solutions bridge the gap between receipt of your sales proceeds and settlement of yourtrade payables, enhancing buyer-supplier relationships and improving cash flow to meet the unique needs of your business.


Import Finance SolutionOvercome cash flow constraints with tailored financing solutions


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Related products

• Comprehensive Import DC and Documentary Collection Solutions. Support from HSBC’s team of trusted financial professionals to make your international transactions happen at the speed of your business.

• Shipping guarantee/delivery order/air waybill release. Allows you to take control of goods without presenting an original copy of transport documents when goods arrive before the documents, thereby avoiding additional storage fees or demurrage charges.

• Pre-set exchange rates and forward contracts/ options. Protect your business against future currency fluctuations by fixing an exchange rate upfront.

• Guarantees and standby letters of credits HSBC provides a range of guarantees, bonds and standbys that may advance the competitive power of your business. HSBC’s geographical reach means that we have experts on the ground ready to deliver support, whether you need bid bonds, advance payment guarantees or standbys issued for commercial or statutory requirements.

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Renminbi (RMB)

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ClientClient’s approval signifies that all is correct as on final proof

7572117/10/2012A4 Fact sheetRamonCA2 18/10/2012

HSBC Bank plc is the first bank in Malta to launch a full service Chinese Renminbi proposition (including International RMB Business Accounts domiciled in Malta, Direct Payment Capability, Trade-related Services i.e. Documentary Credits, Collections etc, Foreign Exchange Transacting and Risk Management)

Reasons and opportunities for business

• The partial de-regulation of the Chinese market and the increasingly rapid growth of the RMB as a global currency (by 2015, the expectation is that RMB will be among the top three international currencies).

• China is already the world’s second largest economy and the largest exporter of goods world-wide; It is expected that more Chinese trade partners will want to receive and make payments in RMB (HSBC currently estimates that by 2013-15, more than USD 2 trillion – or half of China’s total trade flows with emerging markets – will be settled in RMB). The volume of trade settlements in RMB in the first 4 months of 2011 amounted to USD510 billion – more than in the whole of 2010, reflecting a natural trend.

The full service RMB proposition ensures HSBC customers are able to develop and take advantage of business opportunities in China.

This could be the right solution for you if your business...

• is looking to develop your products and services in new markets i.e. China

• is looking to become more competitive by dealing directly in RMB

• would like to benefit from support to help you negotiate better prices in China (through paying in RMB) or manage your own currency strategy from Malta

• wants to manage the costs of foreign exchange transactions or currency risks.

Key features and benefits

• RMB trade settlements – Maltese businesses can now settle trade transactions in RMB regardless of whether the destination of funds is outside China (offshore) or on the Chinese mainland (onshore)

• Easy to use – Trade finance needs can be initiated and managed in RMB through the Internet Trade Services module on HSBCnet

• Reducing complex conversions – Recent liberalisation of the Chinese currency means that businesses outside China can already buy and sell directly in RMB

• Capacity to meet the requirements of Chinese suppliers – For a Chinese supplier, receiving payments in their local currency means they do not have to incur costs of Foreign Exchange (FX) and are not exposed to currency fluctuation risk

• Better pricing and terms of trade – Offering to settle trade transactions in RMB may be beneficial for Maltese businesses as Chinese suppliers may be willing to negotiate on better pricing

• Widen customer base – For example, Chinese importers, who had previously sourced in-country to avoid foreign exchange risks, can now import internationally without those risks. This could open new markets to Maltese exporters.

Approved and issued by HSBC Bank Malta p.l.c., 116, Archbishop Street, Valletta VLT1444. HSBC Bank Malta p.l.c. is licensed by the Malta Financial Services Authority.75721 - 10/2011

Next steps

• Do you deal with Chinese companies? Could you become more competitive by settling your trade transactions in RMB?

• Have you considered the advantages of a full range of FX solutions, including forward contracts and options, to help you manage the currency risk between and RMB?

• Would the opening of an RMB foreign currency account in Malta help you manage those inevitable timing differences when making or receiving RMB payments or settling trade transactions?

• Could you benefit from the support of one of our dedicated Relationship Managers to help manage your risks and possibly negotiate better prices in China or manage your own currency strategy from Malta?

Contact points

For further information please contact your HSBC Relationship Manager or Trade and Supply Chain Specialist today.

If you do not have a Relationship Manager, or are not an HSBC customer, call us on 2380 1843 during office hours or contact Business Banking Direct on 2380 8000 from 8.00am to 5.00pm Monday to Friday (excluding public holidays). Alternatively you may also visit our website www.hsbc.com.mt/commercialbanking


[email protected]

This could be the right solution for you

• If you are selling directly to trade buyers on credit terms locally and/or overseas, and invoicing upon delivery of goods or provision of a service; and

• If you are seeking a professional collections and cash allocation process to help save time and resources; and

• If your business has a projected turnover of at least §150K (including VAT)


Factoring with HSBC is a package normally made up of Finance, Sales Ledger Management and Credit Protection.

Factoring gives you control over customer credit and the risk it poses to your business and could also cost less than employing your own staff to manage your sales ledger.

• Sales Ledger Management – let us manage your ledger for you. HSBC will:

– process your sales invoices and/or credit notes: you need only send them to us, electronically or by post. When your customers pay, we will bank and allocate any payments received

– agree payment targets with you in advance

– provide a dedicated credit controller plus a professional collections and cash allocation process

– send customer account statements and appropriate reminder letters for all outstanding debts, adding telephone calls where necessary

– handle calls from your customers about their account and will pass queries that we cannot resolve back to you, via the Internet Invoice Finance facility

Invoice Finance The essentials


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• Management information – we will update your sales ledger as and when new information is received, so you can track your exact position and download a variety of reports using Internet Invoice Finance

• Dedicated Invoice Finance Manager

• Finance – a fast and convenient solution to cash flow that grows as you do. The finance service can be presented as a simple five-step process:

– You make a sale on credit terms, and provide the goods or services to your customer

– You send the invoices to us, by post or online via our Internet Invoice Finance facility

– We make up to 85% of the value of the invoices available the next working day

– HSBC sends statements and reminders, undertaking telephone credit control as appropriate

– Once payment is received from the customer, you receive the remaining balance less our charges

• Credit Protection (optional) – a flexible, cost-effective alternative to trade credit cover that guards against late payment and bad debts, giving you confidence to accept new orders. There is no complex claims procedure, unlike a credit insurance policy, and no cost of taking legal action over the protected portion of debts

What it costs

HSBC’s straightforward prices are agreed on an individual basis for at least 12 months.

• For our Factoring service, there is a service charge based on your projected turnover and number of active customers. It is normally up to 3.0% of your invoiced sales depending on your workload and annual turnover

• For our Finance service, there is a discounting charge for funding. It is typically a margin over HSBC Bank plc Base Rate, payable on funds you draw from us

• For our optional Credit Protection service, the cost is added to the service charge. It is normally between 0.5% – 1.0% of the value of your invoiced sales

Contact points

For further information please contact your HSBC Relationship Manager.

If you do not have a Relationship Manager, or are not an HSBC customer, call us on 2380 1827 or, our Business Banking Direct on 2380 8000 to discuss your requirements. Alternatively you may email [email protected]

You may also visit our website www.hsbc.com.mt/commercialbanking


Approved and issued by HSBC Bank Malta p.l.c., 116, Archbishop Street, Valletta VLT1444 HSBC Bank Malta p.l.c. is licensed by the MFSA to conduct investment services business and is enrolled as a tied insurance intermediary of HSBC Life Assurance (Malta) Ltd..75721-10/2012


• If you want to be in control of your accounts

• If you want to do your banking when it suits you

• If you want a simple-to-use online banking system

• If you want modern security measures, including your own security token and password


• Access to the service is free of charge and easy to set up

• Get real-time balances on your HSBC Malta accounts

• Commercial cards – see current transactions and last month’s statement for each card

• Access the accounts of your other businesses from a single logon, if required

• Make payments up to §580,000 a day

• Allows you to view credit card accounts

• Offers the facility to effect utility bill payments and stationery orders

• Transfer money between your accounts in real time

• Open (in real time) term deposit accounts

• Communicate confidentially with us online

• Create, view, amend or cancel standing orders

• Stop a cheque, order a new chequebook or paying-in book

Business Internet Banking


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Product details

• Log-on with your own unique username, security token and password

• Set up and control the access rights, payment limits and privileges for up to 99 users online

• Link up to 20 companies under one portfolio (link a group of companies under one security device)

• Choose from Bill, or Priority Payments to make euro or other currency payments to Malta and international beneficiaries

• Make repeat payments by storing beneficiary bank account details

• Dedicated team of customer care representatives on 2380 8000 between 8.00am and 5.00pm in order to assist you with any queries

Pricing

• Our standard tariff shall apply

Contact points



See also our other factsheet: Business Telephone Banking



• If you have cheques and large amounts of notes/coins to deposit on a regular basis

Cash and cheque deposits collected by security courier


• An approved security carrier collects cash from your premises

• Cash collected by 1pm is processed on the same day

• Saves time and removes the risks involved in taking cash to a branch

• Potential to reduce business insurance costs

• Deposits are sealed in plastic bags

Deposit Machines


• A number of machines spread all over the island

• Some machines are available 24x7

• Saves time (no queues)

• Reduce risk

• Envelopes available for cash and cheques

• Deposits placed prior 1.15pm are processed on the same day

Cash and Cheque Deposit collected by Security Courier and Deposit Machines


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Contact points


If you do not have a Relationship Manager, or are not an HSBC customer, call us on 2380 1752 or our Business Banking Direct on 2380 8000 to discuss your requirements. Alternatively you may email [email protected]. You can also visit our website www.hsbc.com.mt/commercialbanking.



Direct CreditsThis could be the right solution for you

• If you make payments in respect of: e.g. salaries, settlement for goods and services

• If you wish to be efficient in settling your payments

• If you wish to pay on a particular date of your choice

• If you wish to reduce administrative costs in issuing cheques and reconciling them when they are cashed

• Eliminate lost cheques and the resultant administrative work (re-issue, stop payment)


• Allows you to pay your beneficiaries on any given date

• Funds are credited to beneficiaries on the same day that your account is debited

• You submit payment instructions electronically from your office via file transfer

• You can subsequently reconcile the bulk debit on your account against the file total


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Product details

• Payments can be made to beneficiaries at other Banks

• We will provide you with specifications for the file transfer

• We will provide you with an agreement that you will need to sign prior to taking up the service

• You will require a modem to transfer files electronically

• Files must contain 10 or more payments

• Manual instructions are accepted (10 or more payments)

Pricing

• Our tariff for bulk payments (electronic/manual), shall apply

Contact points


If you do not have a Relationship Manager, or are not an HSBC customer, call us on 2380 1752 or our Business Banking Direct on 2380 8000 to discuss your requirements. Alternatively you may email [email protected]



See also our other factsheet: Direct Debits

Approved and issued by HSBC Bank Malta p.l.c., 116, Archbishop Street, Valletta VLT1444 HSBC Bank Malta p.l.c. is licensed by the MFSA to conduct investment services business and is enrolled as a tied insurance intermediary of HSBC Life Assurance (Malta) Ltd 75721-10/2012


• If you collect payments from your customers

• If you require to offer your customers an efficient way of settling their payments

• If you wish to improve your cash flow by obtaining credit on your account on the date of your choice

• If you wish to reduce administrative costs in chasing and reconciling payments due

• If you wish to maximise your liquidity by consolidating your accounts


• Once your customers sign a mandate authorising you to debit their account in respect of e.g. subscriptions, insurance policies, etc. it will be a simple matter for you to collect amounts due from your customers on any given date

• Funds are credited to your account in bulk on the date specified by you

• You submit debit instructions electronically from your office via file transfer. You can subsequently reconcile the bulk credit on your account against the file total

Direct Debits


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Product details

• You will need to obtain a mandate from your customers to debit their account

• We will provide you with specifications for the file transfer

• We will discuss with you the agreement that you will need to sign prior to taking up the service

• You will require a modem to transfer files electronically

• Files must contain 10 or more payments

• Manual instructions are accepted (10 or more payments)

Pricing

• Our tariff for bulk payments (electronic/manual), shall apply

Contact points





See also our other factsheet: Direct Credits



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Foreign Cheque Collection and NegotiationThis could be the right solution for you

• If you receive foreign cheques payable in or outside Malta

• If you receive cheques payable outside Malta and confirmation of final payment is required


Collection

• Collection is used where the risk of advancing the funds from a foreign cheque is considered too high or where you require confirmation of final payment

• Funds are paid once they are received by HSBC from the foreign bank. HSBC has no control over the length of time taken for the foreign bank to clear cheques

• Following paying bank’s confirmation, your account is credited with funds without recourse, unless fraud is involved at a later time

Negotiation

• Negotiation is used where HSBC has an established negotiation facility. It is used (a) where the amount of the cheque prohibits processing on a collection basis as you would ultimately receive minimal proceeds after charges have been deducted, or (b) where you do not need to know that the cheque is paid with finality

• You obtain immediate value for cheques, subject to recourse if they are returned unpaid

Product details

• Foreign cheques may be negotiated only:

– for customers of good repute

– where the drawer and drawee banks are of good repute in that country and currency

– up to a maximum amount of §12,000 (or equivalent) per cheque unless authorisation is received from your Relationship Manager

• Foreign cheques are to be sent for collection (even if amount is below §12k) when:

– Knowledge about a customer is insufficient e.g. a new account is being opened with the proceeds

– You request specific advice of fate e.g. you are uncertain whether a cheque will be paid or you are only willing to release goods when the cheque has been cleared

– Payment originates from an Internet sale and not from established buyers that you normally deal with

– The transaction originates from particular countries

Pricing

• Our tariff for cheque Collection and Negotiation shall apply

Contact points


If you do not have a Relationship Manager, or are not an HSBC customer, call us on 2380 1752 or, our Business Banking Direct on 2380 8000 to discuss your requirements. Alternatively you may email [email protected]





• If you receive payments from your business partners for goods and services that you provide

• If you receive payments in euro and other currencies

• If you wish to receive payment on a particular date


• Payments can be received in euro and other currencies

• Various payment types

• You are paid on the day specified in the payment instructions (if payment is technically correct)

• Payments are received via S.W.I.F.T., a secure network with worldwide reach

Product details

• Payment types:

– Urgent/Same day value – where you are paid on the same day that payment is received

– Spot value, a standard time frame – where you are paid 2 working days later (except in the case of weekends and holidays)

– SEPA – non-urgent payments – where we will credit your account on the day of receipt of payment instructions

Inward Payments


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• SEPA payment characteristics:

– Currency must be EUR

– The BIC (SWIFT Code) MMEBMTMT must be present

– Your IBAN (International Bank Account Number) must be present

– Remitter is located in an EU member state

– Non-urgent – value date not specified

– You and the Remitter pay own charges i.e. charges ‘SHA’ (shared)

Pricing

• Our tariff for payments shall apply

Contact points





See also our other factsheets: Business Internet Banking HSBCnet HSBCnet Mobile


HSBCnet MobileBanking in the palm of your hand


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That’s why in addition to desktop access to HSBCnet, our internet-based banking solution, users can also get the information they need right on their smartphones via HSBCnet Mobile. This makes it easier for corporate treasurers to keep business flows moving as they check account balances, receive alerts and authorise payment instructions from anywhere in the world.

This mobile service is complimentary to HSBCnet customers1. There’s no need to download any applications or additional software. Users simply enter www.hsbcnet.com/mobile via their phone’s browser to access the mobile service.

Mobile access to information and payment processing

HSBCnet Mobile helps your organisation improve efficiency by providing on the go access to view account details, get payment alerts and authorise payment transactions. Specifically, you can:

• Access real-time financial data including available balances, current ledger balances, statements and other important account information

• View and authorise urgent payments through the ‘My Alerts’ tool

Leverage the power of HSBCnet Mobile for up-to-the-minute information on cash positions to make business decisions quickly and with greater confidence.

Mobile usage has increased markedly in the last few years. As a result, what was once considered primarily as a social tool is now critical for busy executives to check emails, view documents and conduct business in a secure environment.

HSBCnet Mobile delivers:

• Anytime, anywhere access

• Improved efficiency

• Increased visibility

• Real-time details

• Enhanced cash management

• Faster, better informed decision making

• Proven security protocols

• Execute authorisations including Priority Payments, Eurozone (SEPA) Payments and Inter-Account Transfers with the tap of a finger

In addition, HSBCnet Mobile gives you the ability to reject payments or send them for repair to ensure that cash doesn’t get trapped in the payment cycle.

Enhanced visibility of cash positions

With on-demand access to account balances and payment authorisations combined with timely alerts – HSBCnet Mobile helps your organisation’s leaders make sound business decisions and act on new opportunities quickly. With key treasury functions available on the move, executives spend less time at their desks and more time making the best use of working capital.

Global reach for access from every continent, in every time zone

Compatible with Apple iPhone®, Android™ and Blackberry® operating systems2, HSBCnet Mobile is accessible from anywhere in the world depending on a user’s service and network coverage. Our mobile service is currently available to over 400,000 business people across the globe including Hang Seng Bank (Hong Kong).

HSBCnet Mobile is available in 17 languages and for ease of use the language displayed is determined by the desktop HSBCnet user profile.

A simple, secure mobile service

HSBCnet Mobile has the same robust security as the desktop service including SSL v3 – 128 bit data encryption technology and two-way authentication, which requires a security device for log on and all subsequent transaction authorisations. For added protection, the service automatically times out after a period of inactivity.

Turn the HSBC advantage into your competitive edge

With nearly a century-and-a-half of experience behind us, HSBC offers you the powerful mix of global reach and local knowledge. As a result, you have access to the expertise, stability and fiscal strength of one of the world’s leading financial institutions combined with the reliability, service, character and integrity of a local bank.

Contact points

Contact us to find out how HSBCnet Mobile can help improve operational efficiency and enhance your company’s ability to manage cash flows.





See also our other factsheet: HSBCnet

‘HSBCnet mobile is available to our HSBCnet clients in 66 countries worldwide, enabling greater flexibility when managing working capital regardless where our clients do business. We believe we are the first bank to offer a solution in so many major markets, including Malta. It is a simple and secure service to meet today’s changing business needs’

Mr Michel Cordina, Head of Commercial Banking.

Let us show you how we can put the world’s leading international bank to work for you.

1Excluding HASE China, Korea and Taiwan.

2The following devices and operating systems are supported on HSBCnet Mobile:Apple® iPhone: iOS 3, iOS 4 and iOS 5 Android™: Android 2.2 and 2.3 BlackBerry®: OS 6.0 and OS 7.0

HSBCnet has verified the compatibility of these mobile devices and operating systems for use with HSBCnet Mobile. Please note that HSBCnet functionality may perform normally using other operating systems, but compatibility cannot be confirmed at this time.

Blackberry® is a registered trademark of Research In Motion Limited (RIM). Apple® iPhone is a registered trademark of Apple Inc., registered in the U.S. and other countries. Android™ is a trademark of Google Inc.

© Copyright HSBC Bank plc 2012. ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Bank plc.

Approved and issued by HSBC Bank Malta p.l.c., 116, Archbishop Street, Valletta VLT1444. HSBC Bank Malta p.l.c. is licensed by the MFSA to conduct investment services business and is enrolled as a tied insurance intermediary of HSBC Life Assurance (Malta) Ltd. 75721-10/2012

REQ NO: 76436DATED: 05/12/12SPECS: Fact Sheet netACC. EXEC: RamonDESIGNER: ChrisPROOF: 1 PROOF DATE: 10/12/12

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• If you want to be in control of your accounts

• If you want to do your banking when it suits you

• If you want a simple to use online banking system

• If you want modern security measures, including your own security token and password

• If you pay local and overseas suppliers in local and foreign currencies

• If you receive payments from local and overseas contacts in local and foreign currencies

• If you hold accounts with HSBC in other countries or wish to do so


• Effect payments and pay bills

• Get real-time balances on your HSBC Malta accounts

• Log-on with your own unique username, security token

• Access the accounts of your other businesses from a single logon, if required

• No limit for the number of companies you may wish to link under one logon

• Interacts with your accounting system (through the use of the MT103 file format interface) thus once a payment is posted in the ledger books an export file will be generated and interpreted by HSBCnet

HSBCnet

• Set up and control the access rights and payment limits

• Daily limits on the transactions are set and maintained by the system administrator

• Offers you the option to set up multiple levels of authorisations (including in sequence authorisation)

• The facility to set up to 10 authorisation groups

• The facility to set up restricted templates thus limiting users/set of users to effect payments only to a nominated group of beneficiaries

• Total control and administration of user logons/creations resets

• Onsite demo by an HSBCnet Official which will help in preparing the initial user setup and guide the users in effecting payments/transfers

• Dedicated telephone support 2380 3705 for online assistance between 8.00am to 4.00pm

Product Details

• Payment types: – Priority (same day value) – Spot value – SEPA

• Priority payments and transfers can be prepared up to 30 days in advance

• Repeat payments can be stored on the system

• Transfer money to/from your accounts

• See also key features and benefits

Pricing

• Our tariff for electronic payments shall apply

Contact points





See also our other factsheet: HSBCnet Mobile



• If you have local and overseas suppliers of goods and services

• If you pay in euro and other currencies

• If you wish to be efficient in settling your bills/invoices

• If you wish to pay on a particular date of your choice

• If you wish to ensure that supplier receives payment


• Payments can be effected in euro and other currencies

• Various payment types

• Beneficiary paid on the day that you request

• Payments effected via S.W.I.F.T., a secure network with worldwide reach

Product details

• Payment types:

– Urgent/Same day value – where beneficiary is paid on same day

– Spot value, a standard time frame – where beneficiary is paid 2 working days later (except in the case of weekends and holidays)

– SEPA – non-urgent payments – where beneficiary is paid within 3 to 4 working days

Outward Payments


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• SEPA payment characteristics:

– Currency must be EUR

– Beneficiary Bank BIC (SWIFT Code) must be present

– Beneficiary IBAN (International Bank Account Number) must be present

– Beneficiary is located in an EU member state

– Non-urgent – value date not specified

– Remitter and Beneficiary pay their own charges i.e. charges ‘SHA’ (shared)

Pricing

• Our tariff for payments (electronic/manual), shall apply

Contact points





See also our other factsheets: Business Internet Banking HSBCnet HSBCnet Mobile


Our Business Telephone Banking on 2380 8000 gives you:

• An automated banking service 24 hours a day, 365 days a year

• Availability of a dedicated team of Customer Service Representatives to help you find a solution to your business needs

• Two levels of authority that may be assigned to any of your employees

• Saving of time and money


• Quick access to up-to-date balances and details of recent transactions

• Open new accounts

• Transfer of funds between accounts and bill payments facility

• Request information on business and personal banking products and services

• Assign different authority levels to your staff (enquiry only or full rights)

• You/your employees will be fully identified when speaking to our dedicated representatives

• Dedicated staff to assist you in your financial requirements


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Business Telephone BankingA simple and secure way to conduct your business financial needs over the phone

Eligibility

Anyone running a business, including self-employed professionals and sole traders

How does it work?

• Simply call 2380 8000

• Select the desired language: 1 for English or 2 for Maltese

• Key in your Electronic Banking Number (EBN) and a personal six-digit Personal Identification Number (PIN)

• Simply follow the instructions in order to proceed accordingly

Contact points



See also our other factsheet: Business Internet Banking


If your customers want to pay using credit or debit cards, HSBC Merchant Services Ltd1 can help your business to accept card payments.


• If you want to be able to offer your customers a fast, efficient way of paying for goods and services

• If you wish to accept Quikcash plus internationally recognised cards in particular VISA, MasterCard as well as Diners International Cards

• If you want to enjoy the benefits of the latest anti-fraud features – Chip and PIN


• Simplicity – We will provide you with the most suitable terminal for your business that is compact and easy to use

• Speed – A quicker, smoother way to process card transactions leaving you more time with your customers lowering insurance costs and facilitating reconciliations. Transaction proceeds (net of our processing commissions) are credited to your account on the next business day if the account is held with HSBC Bank Malta p.l.c.

• Security – Reduced cash handling and therefore more security. Reducing the number of cheque payments handled, also reduces the possibility of receiving unpaid cheques

• Convenience – As well as an electronic solution you will be provided with a start-up pack containing easy-to-understand operating instructions, a back-up manual facility and in-store display material. In addition to our standard electronic card processing service, we may also support you with any of the following needs:

• Pre-authorised transactions (for hotel check-in/check-out)

• Multi-currency card processing

• Portable and/or mobile terminals

Card Processing – Electronic Point of Sale Terminals

REQ NO: 74482DATED: 29/05/12SPECS: Fact SheetACC. EXEC: RamonDESIGNER: ChrisPROOF: 7 PROOF DATE: 17/08/12

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• Fully integrated banking – If your business banking is with HSBC Bank Malta p.l.c. (our preferred service partners), you will be able to take further advantage of a seamless service that is supported by HSBC’s trained staff

• If you have an HSBC Bank Malta p.l.c. bank account, you need to complete a consent form

Pricing

• A standard tariff shall apply, with requests for shaded rates being subject to a business assessment

Contact points

For further information please contact:

• HSBC Bank Malta p.l.c. Call Centre on 2148 8400. Lines are open from 8.00am to 4.00pm Monday to Friday (excluding public holidays)

• Your HSBC Bank Malta p.l.c. Relationship Manager

• Any HSBC Bank Malta p.l.c. office

1Card Processing services are provided by HSBC Merchant Services Ltd., HSBC Bank Malta p.l.c.’s preferred strategic partner for card processing in Malta. HSBC Merchant Services Ltd is licenced by the MFSA and is a wholly owned subsidiary of Global Payments Inc, one of the world’s largest transaction processors and is not part of the HSBC Group of companies.


If your customers want to pay using credit or debit cards, HSBC Merchant Services Ltd1 can help your business to accept card payments.


• If you wish to expand your business both in Malta and abroad by advertising the sale of your goods and services over the internet

• If you require to offer your customers a secure, efficient way of payment that is available 24 hours a day

• If you wish to improve your cash flow and competitiveness

• If you wish to accept Quikcash plus internationally recognised cards in particular VISA, MasterCard as well as Diners International Cards


• Simplicity – Once your eCommerce system has been set up, it would be a simple matter for your clients to access your website, view their requirements, and arrange to pay online by quoting their card number and CVV security code

• Speed – eCommerce provides a quicker and smoother way to process card transactions leaving you more time to attend to your clients’ requirements

• Convenience – Besides offering 24-hour access, eCommerce allows your clients to view and purchase your goods and services from the convenience of their homes. If you seek to quote prices other than EUR, we also offer multi-currency card processing in GBP/USD

• Fully integrated banking – Provided your business banking is with us, you will be able to take further advantage of a seamless service that is supported by our trained staff

Online Card Processing (eCommerce)

REQ NO: 74482DATED: 29/05/12SPECS: Fact SheetACC. EXEC: RamonDESIGNER: ChrisPROOF: 3 PROOF DATE: 17/08/12

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Product details

• You will need to set up a website to advertise the sale of your goods and services

• We will provide you with our standard list of website terms and conditions that your webmaster should include in the website to reduce the possibility of receiving chargebacks (claims for refunds) from cardholders

• You will need to engage the services of an Electronic Payments Gateway provider that will be responsible for the secure payments link between the cardholder, your website, and the bank. The Gateway operator requires having Payment Cards Industry (Data Security) standards

• Cardholders will log on to your website, and will be requested to quote their card details and CVV code in order to pay for the goods and services they wish to purchase

• The transaction will be carried out within the secure environment operated by the Electronic Payments Gateway provider that will obtain electronic authorisation for the amount of card payment direct from the Bank

• The Electronic Payment Gateway provider will electronically confirm to the cardholder that the transaction has been authorised besides to yourself so that you may provide the requested goods and services

• All proceeds generated via eCommerce shall be credited directly to your account (net of Bank fees) on the next business day if the account is held with HSBC

• If you have an HSBC Bank Malta p.l.c. bank account, you need to complete a consent form

Pricing

• A standard tariff shall apply, with requests for shaded rates being subject to a business assessment

Contact points

For further information please contact:

• HSBC Bank Malta p.l.c. Call Centre on 2148 8400. Lines are open from 8.00am to 4.00pm Monday to Friday (excluding public holidays)

• Your HSBC Bank Malta p.l.c. Relationship Manager

• Any HSBC Bank Malta p.l.c. office

1Card Processing services are provided by HSBC Merchant Services Ltd., HSBC Bank Malta p.l.c.’s preferred strategic partner for card processing in Malta. HSBC Merchant Services Ltd is licenced by the MFSA and is a wholly owned subsidiary of Global Payments Inc, one of the world’s largest transaction processors and is not part of the HSBC Group of companies.



Art Director

Acc Executive

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Currency Options – ExporterForeign Exchange Risk Management SolutionsA currency option provides you with the right to certain protection at a specified foreign exchange rate on a specific forward date. You are however under no obligation to deal at your protected rate and you may walk away from the deal at maturity and transact in the spot market if the rate has moved in your favour. A currency option therefore combines the certain protection provided by a forward foreign exchange contract with the flexibility of a spot deal. A premium is payable for a plain (vanilla) currency option. Currency options are available in nearly any currency pair where there is a forward market.

To take out a Currency Option you need to advise us of the amount, the currencies involved, the expiry date and the exchange rate that you are looking to protect.

This product is best explained with an example.

How a Currency Option works

For example, you export materials to the US and will receive USD500,000 in six months time.

The forward rate for six months is 1.2500 and you are seeking to protect at that level.

HSBC sells a Currency Option to you providing protection at 1.2500, for which a premium is payable. However, at maturity, if the rate in the market is more favourable than 1.2500, you simply deal in the spot market.

Possible scenarios:

Scenario 1: EUR/USD strengthens and at maturity the exchange rate is 1.3500. You exercise the right to sell USD500,000 at 1.2500.

Scenario 2: EUR/USD weakens, and at maturity the exchange rate is 1.1500. You let your Currency Option expire and simply sell USD500,000 at the market rate of 1.1500.

Exc

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Scenario 1

ProtectedRate 1.7500

Scenario 2

Time

1.85

1.80

1.75

1.70

1.653m 6m

Advantages

• Provides protection on 100 per cent of your exposure

• Allows you to benefit in full from favourable currency moves

Disadvantages

• A premium is payable

Key facts

• No credit line is required

• Available in any currency pair where there is a liquid forward market

Contact points


If you do not have a Relationship Manager, or are not an HSBC customer, call us on 2380 2217/8 or our Business Banking Direct on 2380 8000 to discuss your requirements. Alternatively you may email [email protected]


Important: Please read carefully

This document is issued by HSBC Bank Malta p.l.c. (“HSBC”). HSBC is authorised and regulated by the Malta Financial Services Authority (“MFSA”) and is a member of the HSBC Group of companies (“HSBC Group”). Any member of the HSBC Group, together with their directors, officers and employees may have traded for their own account as principal, underwritten an issue within the last 36 months, or have a long or short position in any related instrument mentioned in this material.

Spot and forward foreign exchange transactions generally are not ‘instruments’ in terms of the Second Schedule to the Investment Services Act, 1994 and therefore do not benefit from the protections of the Act or the rules of the MFSA. Any other product described in this document (Interest Rate Swaps) is an “instrument” as defined in the Act, even when used to cover a commercial trade position. Hedging instruments, such as caps or options, even when used to cover a commercial position, are investments under the Act.

This document is for information and convenient reference, and is not intended as an offer or solicitation of the purchase or sale of any derivative product. HSBC is under no obligation to keep current the information in this document. This document is not intended to provide and should not be relied upon for tax, legal or accounting advice. Prospective investors should consult their tax, legal, accounting or other advisors.

Figures included in this document may relate to past performance or simulated past performance. Past performance is not a reliable indicator of future performance. The instruments appearing in this document are not readily realisable investments; it may also be difficult to obtain reliable information about their value or the extent to which they are exposed.

Investments can fluctuate in price or value and prices, values or income may fall against an investor’s interests. Changes in rates of exchange and rates of interest may have an adverse effect on the value, price or income of these investments. The levels and bases of taxation can change.

Derivatives can be utilised for the management of investment risk, however, derivative instruments may not be suitable for all investors, as they may be contingent liability transactions such as swaps. This means that the investor may not only lose all the amount invested, but may also have to pay an additional sum at a later date. Prospective investors should ensure that they read the applicable standard risk warning in conjunction with this document, and where necessary seek advice.

This document is a “marketing communication” within the scope of the rules of the MFSA.

HSBC Bank Malta p.l.c. Regulated by the Malta Financial Services Authority Registered Office: 116, Archbishop Street, Valletta VLT1444 Malta Member HSBC Group



Art Director

Acc Executive

Client

A currency option provides you with the right to certain protection at a specified foreign exchange rate on a specific forward date. You are however under no obligation to deal at your protected rate and you may walk away from the deal at maturity and transact in the spot market if the rate has moved in your favour. A currency option therefore combines the certain protection provided by a forward foreign exchange contract with the flexibility of a spot deal. A premium is payable for a plain (vanilla) currency option. Currency options are available in nearly any currency pair where there is a forward market.

To take out a Currency Option you need to advise us of the amount, the currencies involved, the expiry date and the exchange rate that you are looking to protect.

This product is best explained with an example.

How a Currency Option works

For example, you import materials from the US, and need to buy USD500,000 in six months time to pay a supplier.

The forward rate for six months is 1.2520 and you are seeking to protect 1.2500.

HSBC sells a Currency Option to you providing protection at 1.2500, for which a premium is payable. However, at maturity, if the rate in the market is more favourable than 1.2500, you simply deal in the spot market.

Possible scenarios:

Scenario 1: EUR/USD weakens and at maturity the exchange rate is 1.1800. You exercise the right to buy USD500,000 at 1.2500.

Scenario 2: EUR/USD strengthens, and at maturity the exchange rate is 1.3500. You let your Currency Option expire and simply buy USD500,000 at the market rate of 1.3500.

Currency Options – ImporterForeign Exchange Risk Management Solutions Global Markets

Advantages

• Provides protection on 100 per cent of your exposure

• Allows you to benefit in full from favourable currency moves

Disadvantages

• A premium is payable

Key facts

• No credit line is required

• Available in any currency pair where there is a liquid forward market

Contact points


If you do not have a Relationship Manager, or are not an HSBC customer, call us on 2380 2217/8 or, our Business Banking Direct on 2380 8000 to discuss your requirements. Alternatively you may email [email protected]












Exc

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Scenario 2

ProtectedRate 1.7500

Scenario 1

Time

1.35

1.30

1.25

1.20

1.153m 6m


Art Director

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Foreign exchange is simply the exchange of one currency for another, but it can take many forms. This fact sheet covers the two basic foreign exchange products – spot and forward exchange contracts.

Spot foreign exchange

A spot contract is a binding obligation to buy or sell a certain amount of foreign currency at the current market rate, for settlement in two business days’ time. To enter into a spot deal you advise us of the amount, both currencies involved and which currency you would like to buy or sell.

Purpose

All companies who have foreign currency exposure may use a spot deal. But they are most commonly used by companies exposed to transactional risk.

Settlement

A spot deal will settle (in other words the physical exchange of currencies) two working days after the deal is struck. This “value date” reflects both the need to arrange the transfer of funds and, in most cases, the time difference between the currency centres involved, one or other of which may well be closed at the time of the trade.

Summary

Forecasting exchange rates is very difficult – you cannot know for certain what the exchange rate is likely to be by the end of today, let alone a few months. A company using only the spot market for its foreign currency requirements is using the simplest method, but at the same time the most risky.

If you placed an order for raw materials from US for payment in three months’ time, and use the spot market to meet the invoice when it falls due, your company could lose significantly if rates move against you over that three month period.

Key facts

Minimum deal size: No minimum

Maximum deal size: No maximum

Credit line: Not required

Currency pairs: In any currency pair where there is a liquid market

Foreign Exchange – spot and forward contracts

Forward exchange contracts

A forward exchange contract (or forward contract) is a binding obligation to buy or sell a certain amount of foreign currency at a pre–agreed rate of exchange, on or before a certain date. Contracts can be taken out for completion on an agreed date or at any point between two pre-agreed dates (up to three months apart). To take out a forward contract you need to advise us of the amount, both currencies involved, the expiry date and whether you would like to buy or sell the currency on the expiry date or any time during a pre-agreed period.

Purpose

A forward contract is the simplest method of covering exchange risk, without having to worry whether the spot market is going to move against you. This overcomes one of the problems that you can experience when importing or exporting in foreign currency, as you can now budget at a guaranteed rate of exchange.

Pricing

The price of a forward contract is based on the spot rate at the time the deal is booked, with an adjustment which represents the interest rate differential between the two currencies concerned. For example, you need to buy US dollars in three months’ time. Say US interest rates are higher than Euro interest rates. The pricing principle assumes that HSBC buys US dollars now, paying for the dollars with euro, in order to meet our obligation to you under the contract in three months’ time.

We pass on to you the benefit of the higher rate of interest we earn on the dollars. The adjustment to the spot rate means that the forward contract rate would be more favourable than a spot deal rate. The reverse would apply if US interest rates were lower than UK rates.

Summary

• A forward contract protects your company against adverse movements in exchange rates

• You can be sure of meeting a budget rate for the transaction

• A forward contract is an obligation. Even if your requirements change over the term of the forward contract, you are still obliged to deal

• A forward contract obliges you to deal at a specific rate – you are not in a position to benefit from any favourable movements in exchange rates between booking the contract and completing the deal

• No premium is payable

Key facts

Minimum deal size: No minimum

Maximum deal size: No maximum

Period: Usually any period to two years – longer periods are available in certain currencies

Credit line: A credit line is required for forward contracts

Currency pairs: In any currency pair where there is a liquid forward market

Contact points


If you do not have a Relationship Manager,or are not an HSBC customer, call us on 2380 2217/8 or our Business Banking Direct on 2380 8000 to discuss your requirements. Alternatively you may email [email protected]













Art Director

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Identifying the Risk

Businesses that trade or have operations overseas are likely to be exposed to foreign exchange risk arising from volatility in the currency markets.

The most common cause of foreign exchange exposure arises from having to pay invoices for imported raw materials priced in a foreign currency or receiving foreign currency for your exported finished goods. However, exposure can also arise from:

• Your competitors having a cost base and/or selling their products in a foreign currency

• Assets located overseas

• Foreign currency borrowing or surplus cash balances of overseas subsidiaries

• Borrowing denominated in foreign currency

The impact that exchange rate fluctuations have on profitability will vary but in many cases it can be significant.

The following is a simplified extract from a profit and loss account of an exporter that receives revenues in a foreign currency. It shows the impact of, in this case, a 10 per cent adverse movement in the exchange rate.

Income Statement – Post MX move

Sales down 10%

The table shows that following a ten per cent adverse exchange rate movement, this company will need to double its turnover to restore profitability to previous levels! Effective management of this risk is therefore crucial but does not need to be unnecessarily complicated. At HSBC we advocate the use of a simple four point plan to help you adopt a structured approach.

The Four Point Plan

Point 1 – Understand your Exposures

There is a raft of factors to take into account when assessing your exposure to foreign exchange rate risk, for example:

• What proportion of your business relates to imports or exports?

• What currencies are involved?

• What are the timings of payments?

• What impact would an adverse rate movement have on your profitability?

• Is the level of overseas business likely to change?

• Do you pay and receive in the same foreign currency – it may be possible to mitigate the exchange risk by using a foreign currency bank account?

Point 2 – Understand the Products

There are only three basic alternative methods to manage foreign exchange risk.

• Do nothing and buy or sell your currency in the spot market. You act on the day you want to buy or sell your foreign currency. We will quote you an exchange rate and the transaction will settle two working days later. Whilst simple, this approach means you will not know how much euro you will need to pay or receive for your foreign currency until the day in question – this can be a high risk strategy as the exchange rate may have moved significantly since you agreed the price with your customer/supplier. If rates have moved the wrong way, your profit will be reduced accordingly

• Lock in to fixed rates – as soon as you become aware of a need to exchange foreign exchange at a future date, you can fix the exchange rate by booking a forward exchange contract. This approach provides certainty but you could suffer an opportunity loss if rates subsequently move in your favour and you are obliged to transact at the forward contract rate

• Use flexible products – a currency option will offer you the potential for upside benefit if rates move in your favour – like a spot deal, but will provide protection against adverse rate movements – like a forward contract. For this flexibility we will normally charge a premium although there are a range of alternative structured option products available where an up front premium is not required

Identifying and Managing Foreign Exchange RiskForeign exchange risk management solutions

BEFORE (EUR) AFTER (EUR) CHANGE

Revenues 1500 1350 -10%

Variable operating expenses

1200 1200

EBITDA 300 150 -50%

Interest costs 75 75

Depreciation 125 125

EBT 100 -50 -150%

BEFORE (EUR) AFTER (EUR) RESPONSE

Sales Revenues 1500 1350 2700 (+100%)

Variable costs 1200 1200 2400

Gross profit 300 150 300

Fixed costs 200 200 200

Net profit 100 -50 100

Point 3 – Develop a Strategy

It may not always be best to adopt any one of the three alternatives in isolation to manage your foreign exchange risk. Many businesses, reflecting their attitude to risk, their view of the currency markets, preparedness to pay premiums and a host of other factors, will adopt a portfolio approach – using a combination of spot, forward exchange contracts and currency options, HSBC will work with you to develop a strategy that best meets the requirements of your business. For example, in an uncertain exchange rate environment, you may decide to transact 25 per cent of your currency in spot, fix 25 per cent with a forward contract and cover 50 per cent with flexible solutions such as an option. This way, if rates move in your favour, you will benefit on 75 per cent of your exposure (spot and options) whilst if rates move against you, you are protected on 75 per cent (forward contracts and options). This is a balanced approach that provides flexibility, and avoids you paying a premium for all of your protection.

Point 4 – Implement It

It is often tempting to defer a decision to implement your foreign exchange risk management strategy, perhaps in the hope that rates may move in your favour in the short term. Historically, currency markets have been extremely volatile and unpredictable – it makes sense therefore, once you have formulated a strategy, to implement it without delay and ensure your profits are protected.

Summary

For many businesses, the impact of exchange rate volatility can be significant. HSBC has a team of specialists available to advise you on developing an appropriate strategy for your business – please contact your HSBC relationship manager for further details.

Contact points













Approved and issued by HSBC Bank Malta p.l.c., 116, Archbishop Street, Valletta VLT1444 HSBC Bank Malta p.l.c. is licensed by the MFSA to conduct investment services business and is enrolled as a tied insurance intermediary of HSBC Life Assurance (Malta) Ltd. 75721 10/2012


Art Director

Acc Executive

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Businesses with borrowings will be exposed to interest rate volatility. The impact that rate fluctuations have on the profitability of a business will vary, but in many cases, it can be significant. Effective management of this risk is crucial but does not need to be unnecessarily complicated. At HSBC, we advocate the use of a simple four-point plan to help you adopt a structured approach.

Businesses with borrowings will be exposed to interest rate volatility. The impact that rate fluctuations have on the profitability of a business will vary, but in many cases, it can be significant. Effective management of this risk is crucial but does not need to be unnecessarily complicated. At HSBC, we advocate the use of a simple four-point plan to help you adopt a structured approach.

The Four-Point Plan

Point 1 – Understand your exposures

There is a raft of factors to take into account when assessing your exposure to interest rate movements, for example:

• How would changes in rates affect activity in your industry sector? e.g. in the property sector, rates can have a direct impact on levels of demand

• How significant are interest rates in context of your profit and loss?

• What is the period of your borrowings? Clearly, a five year exposure presents greater risk than a one year exposure

• Many economists will talk about the short-term outlook for interest rates – no one can accurately predict the future however and you need to consider the effect of rising rates over the period you have debt, not just the next few months

• What impact would an increase in rates from, say, four per cent to six per cent have? Remember, this represents a 50% increase in costs, not two per cent

• Are your borrowing requirements likely to change in the foreseeable future? Increased rates may materially affect the affordability of future borrowings

• These factors apply equally if your borrowings are in a foreign currency – HSBC risk management solutions are available in all the major world currencies

Point 2 – Understand the products

There are two basic alternative methods to manage interest rate exposure:

• Do nothing and borrow against a floating interest rate e.g. base rate or EURIBOR (European Interbank Offered Rate) – this is potentially high-risk as any increase in rates will lead to a direct increase in your borrowing costs

Identifying and Managing Interest Rate RiskInterest rate risk management solutions global markets

• Lock into fixed rates – you can do this in two ways:

– Take out a fixed rate loan. The rate of interest on the loan will be fixed at an agreed rate for the period of the loan.

– Borrow at a floating rate of interest and swap into fixed rates by way of an interest rate swap. This approach offers greater flexibility than a fixed rate loan. For example you might be borrowing EUR3 million over five years. You might only want to fix part of this, in which case, you could use an interest rate swap to fix, say, EUR2 million. You could also elect to fix for, say, three years rather than the full five year period of the loan. There are other beneficial features to an interest rate swap that are explained in more detail in a separate fact sheet.

– Fixing the rate of interest you pay provides certainty and protects you against future rate rises. The disadvantage can be that by being in fixed you will suffer an opportunity loss if rates fall.

Point 3 – Develop a strategy

It may not always be best to adopt any one of the two alternatives in isolation to manage your interest rate risk. Many businesses, reflecting their attitude to risk, their view of the interest rate market, preparedness to pay premiums and a host of other factors, will adopt a portfolio approach – using a combination of floating and fixed rate products. HSBC will work with you to develop a strategy that best meets the requirements of your business. For example, in an uncertain interest rate environment, you may decide to leave 50 per cent of your debt in floating and fix 50 per cent with an interest rate swap. This way, if rates fall, you will pay the lower rate on 50 per cent of your borrowings (floating) whilst if rates rise, you are protected on 50 per cent of your borrowing (fixed). This is a balanced approach that provides flexibility and avoids you paying a premium for all of your protection.

Point 4 – Implement It

It is often tempting to defer a decision to implement your interest rate risk management strategy, perhaps in the hope that rates may fall in the short term. Evidence shows that rates, when they move, can move quickly – it makes sense, therefore, once you have formulated a strategy, to implement it without delay and ensure your profits are protected in the event rates rise.

Summary

For many businesses, the impact of higher interest rates can be significant. HSBC has a team of specialists available to advise you on developing an appropriate strategy for your business – please contact your HSBC relationship manager for further details.

Contact points















Art Director

Acc Executive

Client

Companies that borrow at a margin over a floating rate of interest will incur additional costs if interest rates rise. Companies may wish to eliminate or reduce this risk by entering into a Euribor Rate Cap.

A Cap may suit a business that:

• Wants to protect against the risk of higher rates

• Believes that rates may fall and wants to retain the opportunity to benefit fully if that occurs and hence does not want to lock in to fixed rates

A Cap is an instrument that is used to set the maximum rate of interest that a borrower will pay.

To enter into a Euribor Rate Cap you need to specify the amount involved, the period for which the cap is required and the interest rate or cap level at which you are seeking protection.

You will be required to pay a premium for this product. The premium can be paid at the outset or in instalments but must be paid in full.

Interest Rate Risk Management SolutionsEuribor Rate Cap

Once the premium is paid, you are protected against rises in Euribor Rate above 3.5 per cent – you will never pay more than 3.5 per cent on the floating part of your borrowings (plus whatever lending margin the Bank charges you). You know that if the rates fall, your interest costs will also fall.

Features

• The Cap stands apart from the underlying loan – for example, it is possible to enter into a Cap with HSBC to protect debt with another financial institution

• A Cap can also be arranged in any major currency or linked to the London Interbank Offered Rate (LIBOR)

Advantages

• The Cap protects you against adverse movements in interest rates above your chosen protection level

• The Cap allows you to benefit fully from any rate falls

• A Cap offers flexibility as it is totally independent from, and does not need to match, the underlying borrowing – you may wish to cap 50 per cent of your debt and leave the other 50 per cent completely floating

• As a company knows the maximum rate of interest it may pay, it can budget much more effectively

• In the event your circumstances change and you wish to cancel the Cap, subject to prevailing market conditions at the time, the Cap may have a value that we will pay to you on cancellation

Disadvantages

• You need to pay a premium for a Euribor Rate Cap

• The premium is non-refundable

Settlement

Settlement of a Euribor Rate Cap is linked to your interest charging period, typically one or three months. Using the example above, HSBC will pay you the difference for every day that the Euribor Rate is above the 3.5 per cent cap level you selected during the period. Any compensation due is paid at the end of the period. If Euribor remains below the cap level, you simply pay interest to the bank at the prevailing Euribor.

Contact points






Art Director

Acc Executive

Client

Companies that borrow at a margin over a floating rate of interest will incur additional costs if interest rates rise. Companies may wish to reduce or eliminate this risk by entering into an Interest Rate Swap. This is an instrument that allows you to swap (exchange) a floating rate of interest for a fixed rate. It can therefore protect you against the risk of rising interest rates.

To enter into an Interest Rate Swap you need to specify to us the amount involved, the starting date and period of the swap. We will then advise you of the fixed rate you will pay – this will be based on the prevailing market rate.

Scenario

Your company borrows EUR1 million for five years at an interest rate margin of 3% over 3 months EURIBOR to fund a factory purchase. Whenever EURIBOR changes, your borrowing rate will be adjusted to the new level, and the risk to your company is that EURIBOR moves up for part or all of the five-year loan period. Your company decides to fix the rate by using an Interest Rate Swap. We quote you a fixed rate to pay us of, e.g. 1.4%, and we agree to pay you. The swap covers only the EURIBOR linked element of your borrowing costs and excludes any borrowing margin payable.

Once you have entered into this arrangement, irrespective of interest rate movements over the specified period, you will pay a fixed rate for your borrowings of, in the example, 4.4% (1.40% + 3% margin).

Features

The Swap stands apart from the underlying loan – for example it is possible to enter into a swap with HSBC to protect debt with another financial institution.

A Swap is an agreement to exchange interest rate liabilities – not principal amounts.

Advantages

• Swapping from floating into fixed rate protects you from the risk of higher rates

• A fixed rate provides certainty for your interest costs

• No premium is needed to enter into a Swap

Interest Rate SwapsInterest rate risk management solutions global markets

3 months EURIBOR

3 monthsEURIBOR

+3%Fixed Rate

1.40%

Company

Bank A

HSBC

The Swap is more versatile than a fixed rate loan, for example:

• You can use a Swap to protect a part of your debt. If you are borrowing EUR1 million, you could enter into a Swap for EUR500,000 effectively fixing half your borrowing costs leaving the other half floating

• You may have a number of loans and other borrowings, e.g. Overdraft, Invoice Finance and Term loans. You can protect all of these with a single swap transaction

• A Swap can be used if, say, you have a five-year loan but you only want to fix the rate for three years. You merely enter a Swap for just three years

Disadvantages

• If you wish to cancel the Swap during its lifetime, there may be a cost depending on prevailing market rates at the time

• If interest rates fall, you are obliged to pay the agreed fixed rate which may be higher than the floating rate

Settlement

Interest on EURIBOR loans is typically charged on a monthly or quarterly basis. Settlement of an Interest Rate Swap is made at the end of your usual interest rate charging period. In the example overleaf, if your usual charging period is three months and your fixed rate is higher than EURIBOR over the previous three months, then you pay us the net difference. If your fixed rate is lower than the EURIBOR over the previous three months, we will pay you the net difference. The end result is that you pay the fixed rate for the duration of the swap.

Contact points












HSBC Bank Malta p.l.c. Regulated by the Malta Financial Services Authority Registered Office: 116, Archbishop Street, Valletta VLT1444, Malta Member HSBC Group


Malta

Malta became a member of the EU on 1 May 2004. On joining the EU, the country’s profile as an international financial services centre was enhanced and given a fresh impetus. Malta formally adopted the Euro as its national currency on 1 January 2008. The financial services sector contributes to around 13% of the country’s GDP and employs circa 7,000 people.

Why Malta?

• EU membership and euro currency;

• A small and very open economy;

• Close links with all neighboring countries in Europe and North Africa;

• An enviable geographic position in the middle of the Mediterranean;

• Efficient air links to major airports in Europe, North Africa and the Arabian Gulf;

• Offers the third largest transhipment port in the Mediterranean. Malta Freeport is located at the crossroads of some of the world’s greatest shipping routes and in the heart of the Europe/Maghreb/Middle East triangle;

• Easily accessible regulatory and decision makers;

• Easily accessible key locations – all within a short driving distance;

• State-of-the-art communications/telecoms network with worldwide links;

• A versatile, flexible and trained workforce;

• Widespread use of the English language and to a lesser extent other languages;

• Hot pleasant summers and mild winters;

• A safe and friendly environment with a varied cultural scenario and colourful nightlife;

• High ranking in competitiveness and relocation surveys.

Malta – your Destination.HSBC Malta – your International Banking Partner.


Art Director

Acc Executive

Client

HSBC Bank Malta p.l.c. [“HBMT”]

HBMT is a member of the HSBC Group, whose ultimate parent company is HSBC Holdings plc. Headquartered in London, HSBC Holdings plc. is one of the largest banking and financial services organisations in the world.

The bank is authorised to carry on the business of banking under the Banking Act, 1994 as a credit institution. Various licences authorise the bank to provide investment services to third parties and trustee or custodian services for collective investment schemes.

The International Banking Centre [“IBC”]

The International Banking Centre is a unit of HSBC Malta specialising in the provision of full banking services to corporate clients registered overseas, trading locally and internationally.

The unit forms part of the Commercial Banking Centre based in Qormi. Embedded within the Commercial Centre, the IBC can leverage the wealth of support and local contacts to provide clients with a superior international service. Office hours are from 8.30am to 4.00pm Monday to Friday.

Types of clients dealt with at IBC

Corporate Customers:

• Locally Registered Offshore Companies

• Locally Registered International Trading Companies

• Locally Registered International Holding Companies

• Locally Registered Foreign Owned Shipping Companies

• Foreign Registered Companies

Services offered

We are able to offer a full range of banking services including:

• Accounts: Opening of EUR and foreign currency accounts, in all the major international currencies. These can be of a Call, Savings or Term nature. Term deposit accounts can range from 7 day to 5 year terms. Interest is paid on maturity or annually for maturities longer than one year

• Internet Banking – HSBCnet

• SWIFT transfers in any major currency to any international destination, as per customers’ instructions

• Foreign Exchange

• Credit facilities – selective cross border lending

• Credit and Debit Cards

• Trade related services such as Documentary Letters of Credit, Inward/Outward Bills for Collection and issuance of Guarantees and Performance Bonds

• Factoring, Merchant Card Payments

• Investment Services via our Wealth Management team. For larger companies our Asset Management Team can assist

• Fund Management services including Liquidity Funds via HSBC Security Services (Malta) Ltd

• Premier banking

• Trust Services

• Custody Services

Relationship management

The IBC offers a high standard of personalised customer service through dedicated relationship managers and account officers who are the main point of contact for all clients’ requirements.

What is more, when clients require advice from specialists, such as tax advisors, accountants, lawyers, notaries and estate agents, appropriate introductions can be made. We have a close rapport with such financial intermediaries and industry practitioners locally and internationally.

Contact with HSBC Group worldwide

The HSBC Group’s international network (as at 14 August 2012) covers 84 countries and territories in Europe, the Asia-Pacific region, the Middle East, Africa, North America and Latin America. Our aim is to be acknowledged as the world’s Leading International Bank. We are thus able to introduce clients to the global resources and expertise of the HSBC Group and assist clients in establishing a relationship with our international centres.

Service highlights

• Local contact point

• Intra country standards and systems

• Access to taxation, company formation experts

• English speaking

• Easy travel connections

• Our office is 15 minutes from the airport

• Regular local events

Benefiting companies

• International companies whising to expand into EU and North Africa

• Companies wishing to trade locally or re-domicile as part of their company structure

Summary

• We create wealth for our international corporate customers by making available to them locally the resources they need, from international experience.

• In meeting the needs of our customers around the world, it is our goal to be recognised as “The World’s Leading International Bank”.

Contact points

George Debono Head of International Banking HSBC Bank Malta p.l.c., International Banking Centre 80, Mill Street Qormi QRM 3101 Malta Tel: (+356) 2380 1724 Fax: (+356) 2380 5624 e-mail: [email protected]



• If you want a preferential credit interest rate

• If you want to place all your business finances in one account

• If you want to make the most of your time by providing all the essential banking without having to visit a branch

• If you want a bank account that works the same hours you do


• An attractive credit interest rate

• One simple account that gives you the benefits of both a current and a savings account with a debit card and a cheque book

• 24/7 Business Internet Banking

• 24/7 automated Business Telephone Banking

• Access to a pool of Business Specialists

• Periodic Business Review

• Customer service representatives available from 8.00am to 5.00pm

• Access to a comprehensive range of business products

Product details

• Eligibility – Available to new and existing small businesses (non-borrowing customers or borrowing up to §200,000)

• Sole Traders/Self Employed

• Partnerships

• Firms

• Associations

• Companies

• Business Direct Account

• Attractive credit interest*

• 24/7 Banking – With 24-hour access online, by telephone or via our self service machines (ATMs and deposit machines), you can take care of your business banking whenever and wherever you are

• Business Review – Periodic review over the phone to review your business needs, to understand and meet your banking requirements

• Business Specialists – Dedicated business specialists to provide you with business support and guidance

Business DirectThe account that saves you both time and money.


Art Director

Acc Executive

Client

• Other Products – Access to a comprehensive range of business products such as credit card, loans, overdrafts and insurance

• Business Banking Direct – Available by calling on 2380 8000

• Customer service representatives available between 8.00am to 5.00pm, Monday to Friday (excluding Public Holidays).

• 24/7 automated system

* Conditions may apply

• 25 free cheques issued per month. A charge of §0.25 applies for each additional cheque.

• 10 free cash withdrawals (excluding coins) at the cashier per month. A charge of §1 for each additional withdrawal applies.


Convenience... all of your Business Banking needs without having to visit a branch

Banking Activity Internet Telephone ATMs

General enquiries on accounts: Transactions Yes Yes Yes Balances – incl. credit card transactions Yes Yes Yes

Transactions Transfer between accounts Yes Yes Yes Payments of bills – free Yes Yes Yes Payments abroad – reduced tariff Yes Yes N/A Standing orders Yes (free) Yes N/A Cheque book Yes Yes Yes Stop payments Yes Yes N/A

e-Statements – free Yes Yes N/A

Enquire about a product or service Yes Yes N/A

Apply for a product or service Open accounts Yes Yes N/A New overdraft or loan/facility Yes Yes N/A Increase overdraft or loan/facility Yes Yes N/A Close accounts No No N/A

Set appointment Yes Yes N/A

Contact points
