Cash Pooling

Effective liquidity management for domestic and international companies

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Optimisation of financial flows

Management of short-term financing
and reduction of costs associated with loans

Tailor-made solutions

Efficient use of available
financial funds

KB’s experience and background

International network
in 50 countries

What is cash pooling and how does it work

Cash pooling enables corporations, municipalities or contributory organizations to efficiently centralise and optimise liquidity, thereby reducing their cost of external financing.

It improves control over cash flows, minimises interest costs and facilitates cash management (cash flows) across the group.

Domestic physical cash pooling

It enables companies to better manage their financial resources and reduce the cost of credit.

Centralised cash management within a group of interconnected companies, whereby funds are physically transferred between the accounts of individual participants and a central (master) account.
Account balances of individual subsidiaries are regularly transferred to the master account (zero balancing) or even between accounts; they are balanced according to pre-set rules, e.g. accounts are zero balanced at the end of each business day according to client requirements.
The objective aim is to minimise external funding, make efficient use of free liquidity, and optimise interest costs at group level.

Domestic notional cash pooling

It allows for more efficient use of cash and optimisation of interest costs without the need for actual financial transactions between individual accounts.

It is a method of managing cash within a group of interconnected companies, where individual account balances are centrally monitored and optimised without actually transferring financial funds.
Individual accounts of the participating companies are linked by records, with the parent company or central financial unit monitoring the overall liquidity and interest costs and/or income, which are calculated on the basis of the aggregate balance, optimising interest costs and income while maintaining the financial autonomy of the individual participating accounts.
Accounts in different currencies may be included.

Technical interest rate rules for multi-currency cash pooling

The document is intended for product users, 175 kB ZIP

SOGE level – international physical cash pooling

It is an advanced method of centralised cash management within a multinational group of companies, where financial funds are physically transferred between accounts in different countries and banks.

Similarly to domestic/local physical cash pooling, balances of individual accounts are transferred to the master account to optimise liquidity and minimise interest costs.
However, international cash pooling must take into account country-specific legislative, tax and regulatory requirements, such as restrictions on cross-border transfers, currency controls or tax implications on interest payments.
This model helps multinational corporations to use financial resources more efficiently, reduce costs of external funding, and improve cash management.