Banking Pool It is a recurrent term used in the financial field, specifically every time a loan or other financing product is requested by any entity or person.
Well, before this request, the bank usually requires a set of informative documents such as the balance of situation, the income statement, last taxes paid and the so-called bank pool, in order to analyze its solvency.
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The administrative department must get used to the banking pool, having a close relationship with banks and other financing entities with which it operates.
In this article you will find:
What is Pool banking?
The banking pool is a report detailing those risks for banking operations such as credits, loans, financing, guarantees, etc., that a legal entity contracts at a certain moment, with certain banks with which it Opera.
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In this document, the company reflects the name of the different banking entities and financial products in contracted with each of them, in addition to the time limits granted to them and the term of expiration.
It is advisable to attach to the report all the latest receipts or the certificate of debts in each bank.
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It must be clear that this requested detail is complementary to the information collected by the bank in the CIRBE (Central Bank of Spain) and the ideal is that both information coincide, although it is worth noting that sometimes they do not happens. It is important to remember that financial institutions only declare credits with amounts greater than 6,000 euros, so the CIRBE may not have targeted risks because they are below that amount, being here the importance of the banking pool when determining the solvency of the company.
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When is the banking pool used?
It is requested by bank managers in different situations, such as:
- To future clients to be aware of the risk they accumulate, at the same time to know the concentration of operations with each financial institution.
- It is also used in contexts such as treasury concentrations or Cash Pooling systems that basically It deals with companies that concentrate their balances in a single bank, known as a pool bank, to operate with a single balance.
Characteristics of the business banking Pool
The banking pool of companies is conditioned by certain internal peculiarities of the same, by its financing needs and service and by the limits granted by each entity, this will depend on the variability and the number of banks they use for their operations.
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It is worth noting that their decision is also influenced by cultural and external factors, such as, for example, countries where companies usually prefer to work with a single entity, which is called monobank culture, in the same way in others preferably it operates with different entities to the time. In this shared case, banking companies see in a good way carrying the risk of financing a company in a competitive world with other entities.
Advantage
- Lower price, product of the accumulation of operations with the same entity.
- There is a greater Company-bank link that connotes better relationships and greater trust.
- It represents less management and administrative burden, since fewer tasks are carried out in terms of reconciliation and verification.
- Make it easy to compare prices.
- Empowers risk sharing.
- It does not allow dependence on a single bank entity.
- It empowers the use of the specialization of banking entities.
- It facilitates the obtaining of a more complete service, obtained with the diversification of entities with which it operates.
Conclution
Finally, it is worth noting that the bank pool externally represents a fundamental document in the study of the level of credit risk of the company. company, allowing banks and other entities to know the financing distribution of the company, studying the possibility of including or not a new financing.
From an internal point of view, it allows the company an overview of the company's indebtedness, in order to constantly assess the need for changes in the foreseeable future.
