Risk management

Guarantees

Security for transactions executed in domestic and foreign turnover

• We ensure professional support of our experts in every situation, clarify all doubts and help to finalise transactions executed on the international market in a safe manner.
• Higher security of transactions based on a commitment made by a bank issuing a payment guarantee (up to a specific amount) to the beneficiary after the latter submits a relevant demand for payment. The payment is made when the party who requested the issue of the guarantee fails to meet contractual obligations secured by the guarantee.
• Guarantee types are adjusted to the types of executed transactions.

Unlike the documentary L/C, the bank guarantee should solely secure a given transaction. The stand-by L/C is similar in nature to the bank guarantee.

Immediate fx exchange transaction

The transaction consists in an immediate sale/ purchase of currency. The currency exchange is executed at an fx rate negotiated directly with a dealer from the Treasury Services Department. The transaction is settled upon its conclusion date or within two working days (i.e. it is settled on the Value SPOT). As part of the transaction, any pair of currencies from the Santander Bank Polska FX Table may be exchanged.

FORWARD transaction

The purpose of FORWARD transaction is to hedge the fx buy or sell rate in the future. On the transaction conclusion date, the customer agrees with the Bank on the strike date, currency amount and hedged fx rate. The hedged fx rate stems from the current market rate, fx interest rate and transaction date. The agreed conditions of the transaction will not change until the transaction settlement date.

FX SWAP transaction

The FX SWAP transaction consists in buying (or selling) a specific amount of currency with a shorter strike date and simultaneous sale (or purchase) of the same amount of currency with a longer strike date, at fx rates agreed on the transaction conclusion date. The fx rates applicable to the transaction are agreed based on the current spot rate, market interest rate of both currencies and maturity date. During the transaction term, the difference in the interest rate of exchanged currencies is expressed in swap points.

Insolvency Risk

The fundamental component of a sales transaction is collection of payment - crucial for an exporter. It is more difficult to resolve in foreign than in domestic trade operations. Therefore the exporter should build in as much security as possible when collecting the money due from a sale.

The variety of ways includes payments in advance, mechanisms involving documentary payments, bank guarantees or even credit insurance provided by an insurance company, that if the money from a sale is not collected, the insurance company will indemnify him for the loss incurred by non-payment.