cipfa scottish treasury management forum current investment practices and investment framework
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Scottish Treasury Management Forum. CIPFA Scottish Treasury Management Forum Current Investment Practices And Investment Framework. Scottish Treasury Management Forum. Investments - Overview. The 2009 remit was to:. - PowerPoint PPT PresentationTRANSCRIPT
CIPFA Scottish Treasury Management Forum
Current Investment PracticesAnd
Investment Framework
Scottish Treasury Management Forum
“review the current investment management practices and bring forward proposals which would form a framework for authorities to work within which will ensure a consistency of approach based on a sound risk assessment in relation to investment opportunities”
The 2009 remit was to:
Investments - OverviewScottish Treasury Management Forum
• Authorities have taken a range of pro-active measures to manage and mitigate the investments risks over the last two years
• Authorities have different requirements and therefore different appetites for risk
• In light of their risk appetite, authorities should continue to consider how they manage their counterparty risk e.g. from the perspective of number, level of commitment, quality etc
• The lessons of BCCI should not be lost on authorities
• Where appropriate, authorities should consider other investment opportunities
2009 Summary
Scottish Treasury Management Forum
• Premature Debt Redemption
• Money Market Funds?
• Collective Local Authority Investment Product?
• Government Backed Certificates of Deposit
• Treasury Bills
• Other Products?
2009 - Other Investment Options
Scottish Treasury Management Forum
Yield
Liquidity
Security
Scottish Treasury Management Forum
• Significant premature repayment of PWLB debt to de-risk investment portfolio
• A reduction in the periods which deposits are placed for
• A tightening of credit criteria used to produce the counterparty list
• Investment with counterparties which would be most likely to receive UK Government and Central Bank support
• Greater use of instant access accounts
• Inclusion of additional more secure counterparties such as the DMO
Security - 2009 Actions Already Taken
Scottish Treasury Management Forum
Refinancing Risk
Scottish Treasury Management Forum
Counterparty Risk
v.
LGov Fin Stats Total Debt
Scottish Treasury Management Forum
TMF Gross Debt
£11,490,801 (‘000)
£10,507,658 (‘000)
31 March 2011 Debt
Whole of Scotland LAs – PWLB Maturity Profile
Scottish Treasury Management Forum
PWLB Maturity Profile (31/03/2011)
0
50
100
150
200
250
300
350
400
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
2043
2045
2047
2049
2051
2053
2055
2057
2059
2061
£(m)
Whole of Scotland LAs – PWLB Rates
Scottish Treasury Management Forum
PWLB Maturity Rates April 2008 to date
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
1 Year5 Years10 Years15 Years25 Years50 YearsBank Rate
Security - Counterparty Concentration - 2009
Scottish Treasury Management Forum
Security - Counterparty Concentration - 2011
Scottish Treasury Management Forum
Pe rce ntage Of De posits W ith Single Counte rparty
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
£0-£5m £5m -£10m £10m -£20m £20m -£30m £30m -£40m £40m +
Security / Yield - Deposit Rates
Scottish Treasury Management Forum
Investments - Scotland-wide Summary
Scottish Treasury Management Forum
2009
£1,003,225,985
2011
£1,751,095,700
+ £748 million
Investments - Scotland-wide Summary
Scottish Treasury Management Forum
2009 2011
DMO £81,530,000 8.13% £40,340,000 2.30%
Local Authorities £93,070,000 9.28% £224,250,00012.81
%
Government Guaranteed £40,000,000 3.99% £38,496,633 2.20%
European Investment Bank £0 0.00% £4,714,206 0.27%
£214,600,00021.39
% £307,800,83817.58
%
Investments - Scotland-wide Summary
Scottish Treasury Management Forum
Treasury Bill Tender Results (April to December 2011)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11
Yield (%)
6 month3 month
1 month
Investments - Scotland-wide Summary
Scottish Treasury Management Forum
2009 2011
Money Market Funds £14,968,021 1.49% £165,133,082 9.43%
Bonds Fund £0 0.00% £20,000,000 1.14%
Other £0 0.00% £1,424,979 0.08%
£14,968,021 1.49% £186,558,06110.65
%
Investments - Scotland-wide Summary
Scottish Treasury Management Forum
2009 2011
Nationwide Building Society £68,500,000 6.83% £36,400,000 2.08%
Other Building Societies £31,900,000 3.18% £0 0.00%
£100,400,00010.01
% £36,400,000 2.08%
Investments - Scotland-wide Summary
Scottish Treasury Management Forum
2009 2011
Lloyds TSB Bank £20,000,000 1.99% £5,500,000 0.31%
HSBC Bank plc £22,300,000 2.22% £20,000,000 1.14%
Barclays Bank £73,500,000 7.33% £93,557,341 5.34%
Other Banks £59,000,000 5.88% £60,000,002 3.43%
£174,800,000.00
17.42% £179,057,343
10.23%
Investments - Scotland-wide Summary
Scottish Treasury Management Forum
2009 2011
Bank of Scotland Plc £228,108,56122.74
% £469,965,06326.84
%
Royal Bank of Scotland £40,316,875 4.02% £315,763,67118.03
%
Santander £102,888,47410.26
% £154,363,973 8.82%
Clydesdale £127,144,05412.67
% £101,186,750 5.78%
£498,457,963.68
49.69% £1,041,279,457
59.46%
Security / Yield - Deposit Rates
Scottish Treasury Management Forum
Fixed Term Deposit Rates - February 2012
0
0.5
1
1.5
2
2.5
3
0 1 2 3 4 5 6 7 8 9 10 11 12
BoSSantander UKPrincipality BSClydesdaleBarclaysRBoSCo-opLeeds BSNationwide BSRabobankHSBCDMO