David Oh, CTP, got his start in treasury fresh out of college as a treasury project associate. In this position, he ran the transactional banking infrastructure project for a European multinational corporation. His role in the project involved integrating newly acquired companies into the group banking infrastructure and rolling out in-house banking and payment factory solutions globally.
“My good performance earned me an internal promotion where I managed the Asia Pacific Treasury Hub Back Office,” said David. In his specialist role, he forecasted the cash needs of the company’s subsidiaries every week and repatriated any excess funds back to the global hub. He was also involved in the setup of regional multicurrency cash pools and the operations of in-house banking and the payment factory.
Today, in Singapore
Today, David is the Group Treasury Manager for Sembcorp Industries Ltd in Singapore. His overarching duty is to manage the financial risks of the Group. In his role as a corporate treasurer, it is his responsibility to ensure the global cash pools are well diversified and funded to meet the day-to-day operational needs of the organization. “The recent collapse of Credit Suisse, Silicon Valley Bank (SVB), Signature Bank and Silvergate Bank sent us another strong reminder of the importance of diversification, even though we have Dodd-Frank Act and Basel III regulations in place,” said David.
Another area David manages is forex risk. He relayed a real-world example of how this plays out with his company. When the “aggressive” rate hike in the U.S. was issued last year, it resulted in funds flowing out of the emerging markets, causing a significant currency depreciation against the U.S. dollar. Hence, whenever possible, natural hedge is used to limit unwanted forex exposures before any hedges are considered.
Managing interest rate risk is the third primary responsibility David is tasked with. “When the Fed became increasingly hawkish in 2022 to combat inflation, we need to start thinking about refinancing the Company’s debt portfolio to fixed rate debts and entering into interest rate derivatives to hedge the interest rate exposure,” said David.
Counterparty risk keeps him up at night
The increasingly fragile financial system, caused by aggressive rate hike, has made a robust and efficient cash management infrastructure more important than ever to move cash effectively into safe havens. “Keeping cash in and doing business with ‘too big to fail’ banks and financial institutions, in addition to diversification, is the only way to prevent total failure risk,” he said.
David used the recent collapse of Credit Suisse and SVB to illustrate why this causes him sleepless nights. “The nightmare of Global Financial Crisis has come back to haunt us again in 2023. The imminent collapse of Credit Suisse (a Global Systemically Important Bank) has sparked fears of a potential widespread of contagion risk across the banking sector. Fortunately, the swift actions from Swiss regulators to rescue Credit Suisse in time with a controversial merger with UBS has saved the day,” he said.
Developing soft skills to become a true business partner
As treasury becomes an increasingly important pillar of the corporate finance function, David plans to pursue the soft skills — effective communication, leadership, resource management and the ability to execute — that will help him become a well-rounded treasurer and value-adding partner to the business. He feels it is particularly important that treasurers possess the knowledge and skills to guide their organizations through the VUCA (Volatility, Uncertainty, Complexity, Ambiguity) world we live in today.
For David, first and foremost, this means developing his leadership skills. “I believe a treasury function that does not understand the Group's strategic initiatives and provide solutions that contribute to the end goal is of no value,” he said. “In order to become a valued member in the corporate finance community, the ability to engage and influence others to develop complex business solutions jointly is of paramount importance.”
The CTP is as necessary as a driver’s license
When David was starting out in his treasury career, he looked for a foundational training platform from which to spring, and he found the CTP program. In addition to the program itself, he said the subsequent webinars and seminars offered by AFP help further sharpen his knowledge and skill set and keep him updated on industry trends and practices, helping ensure he remains relevant in the competitive business world.
“The CTP is like a driver’s license to me,” said David. “It is an essential credential that demonstrates your proficiency in the treasury trade.” With the attainment of the CTP, David advises, your journey has just begun. He said it has opened up many career opportunities for him, especially within American corporates.
Asked if he would recommend the CTP to others, David replied, “A definite yes.” With a CTP behind your name, the employers know you have the right skill set needed for success.
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