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.Through maintaining a robust capital structure with a sufficient liquidity reserve and a conservative refinancing pattern, Statoil is well prepared for a prolonged economic downturn.
2. Corporate funding is primarily in the capital markets (bonds, euro medium-term notes, etc). We may use bank loans and facilities mainly for liquidity-reserve purposes. We use the commercial paper market primarily for short-term funding and have historically not been an active user.
3. We have a pragmatic approach to this. Credit derivatives are expedient tools to allocate credit exposure and suitable for separating relationship issues from credit issues.
4. Statoil’s view is that money market funds are a valuable tool for managing liquidity, alongside bank deposits and commercial paper. Apart from adding flexibility to the operational aspects of liquidity management, they also serve to diversify a corporate’s liquidity portfolio in terms of risk.
5. The banks seem to be making an effort to uphold their service levels and provide the best possible service at all times. We would like them to improve their understanding of customers’ needs and reduce the product sales push.