UniCredit Bank AG and Bank of Tokyo-Mitsubishi have processed the first BPO (Bank Payment Obligation) deal ever between Germany and Japan which is for a transaction between Töging (south of Munich) based RVT Rühr- und Verfahrenstechnik (RVT), a leading producer of industrial mixers, and Mitsui & Co. Plant Systems (MPS), a provider of plants, facilities and equipment to the infrastructure and basic industrial sector in Japan.
The transaction represents another bank going live with BPO taking the total number of banks processing BPOs to fourteen. BPO is an irrevocable undertaking given by a bank, usually the bank of the importer, to the bank of the exporter to make the relevant payment as the invoice falls due.
The transaction allows RVT to receive cover for the payment risk as well as to increase sales volume providing more attractive payment terms to buyers, without jeopardizing liquidity or risk, by selling insured receivables to UniCredit. MPS can avoid sight payment. Instead they can convert bank debt into trade debt. Both exporter and importer can manage the transaction without manual intervention on a fully automated, straight-through processing basis.
Claudio Camozzo, Global Transaction Banking Co-Head at UniCredit and SWIFT Board Member says: “It is a great honour for us to conclude the first BPO transaction with Bank of Tokyo-Mitsubishi, one of our most important and long standing correspondent banks. We fully believe in the concept of BPO which allows us to leverage our broad correspondent banking network while also providing services in support of the ever growing volume of trade transactions that are handled on an open account basis.”
Ernst Ohmayer, Global Transaction Banking Co-Head at UniCredit says: “As the volume of global trade grows, there has been a significant shift from the use of traditional trade instruments, such as letters of credit, to trading on open account, and the market has demanded solutions to help manage increasing cost and risk challenges. We are pleased to offer our corporate clients a BPO solution that fully supports automated processing as well as cost savings combined with payment assurance and financing options.”