The questions
1. World economic growth remains slow. Has your company taken particular financial measures as a precaution against a prolonged downturn? What are they?
2. Most corporates finance themselves with a combination of loans, bonds and commercial paper. How do you decide on the mix that’s right for your company?
3. Many banks use credit derivatives to transfer their lending risk. How do you feel about banks doing this with your loans?
4. Corporate treasurers are being encouraged to place spare cash in money market funds rather than bank deposits. What is your view of this trend?
5. Has the overall service you get from banks improved, got worse or stayed the same over the past 12 months? What kind of further service improvements would you like to see?
1. One of the fundamental elements of Unilever’s financial strategy is to provide sufficient resilience against economic turmoil. Adhering to this strategy ensures that we can manage a prolonged downturn.
2. Key considerations in deciding our funding mix include cost, our liquidity and maturity profile, the diversification of our investor base, maintaining access to key markets, depth of liquidity in particular markets and the overall impact of instruments on our financial flexibility.
3. We can agree to such transfers, on condition that such activity is performed sensitively with respect to scale and timing, it does not adversely affect Unilever prices and it enables banks to extend new credit to other parts of Unilever.
4. We welcome this trend because it offers additional choice to the investor, as long as the risks and rewards of such instruments are transparent and they are managed in a professional manner.
5. Unilever enjoys a high level of service from its banks due to the quality of its banking relationships and we would expect this to continue in the foreseeable future. The banking industry has become more focussed on use of capital but this has not adversely affected the service we receive.