Euro Clearing. Your partner in Euro clearing

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1 Euro Clearing Your partner in Euro clearing Combining experience, process automation and critical mass to provide Euro clearing services A focus on long term customer relationships, based on depth of service, trust and mutual objectives Competitive Euro Clearing Account offering

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3 Security and stability in a new world The banking world is waking new and refreshed after stormy times. As a financial institution, you need to service your clients needs without interruption, efficiently and cost-effectively. In doing so, you build client trust and build new opportunities. This particularly applies to business-critical activities such as payment processing. However, there may seem to be obstacles to doing so outside of the home market, with diverse regulatory requirements and increased reporting and processing complexity. Working with the right bank to provide Euro clearing services can be a vital way of creating simplicity, mitigating risk and delivering an optimal service to your clients. While payments have become a largely commoditised business, the services surrounding them have not. ABN AMRO is committed to long-term relationships with our customers to meet both current and future expectations, focusing on service excellence, security, reliability and continuity of service. Euro Clearing 3

4 Why choose ABN AMRO for Euro clearing? We need a straightforward, automated and robust Euro clearing service delivered by a bank with experience and stability.,, Drivers of change There are major changes underway in the Eurozone which aim to remove barriers between member states, integrate payment processes and enhance the flow of information between financial counterparties: ABN AMRO has proven capabilities as a Euro clearing bank developed over a number of years. We combine experience, processing automation and critical mass to provide an unparalleled service across the Eurozone: Significant market share of commercial and retail Euro payments, with economies of scale through critical mass; Comprehensive SWIFT capabilities, including Exceptions & Investigations and Cash Reporting, with % systems availability ensuring stability and continuity of service; Straight Through Processing (STP) rate of 97%, with automated repair capabilities using market-leading, sophisticated rule-based systems; Dedicated client service team in the Netherlands supporting customers worldwide. SEPA (Single Euro Payments Area) allows you to treat all Euro payments between member states in the same way as domestic payments. SEPA products will ultimately replace domestic Euro payment types to a great extent. SEPA Credit Transfers were launched in January 2008 and SEPA Direct Debits will be available from the end of 2009; The legal framework for payments processing will be consistent across Eurozone countries by November 2009 with the introduction of the Payment Services Directive (PSD). We need take advantage of new opportunities in the Eurozone to enhance our services to customers.,, Navigating your way through new regulations can be a significant challenge, particularly outside your own region. You want to take advantage of new opportunities, whilst providing an uninterrupted service to clients as you implement new regulations, and protecting them from non-compliance. By working with ABN AMRO as your Euro clearing bank, you will enable your clients to take advantage of more automated, timely and low cost Euro payments, strengthening your relationship by delivering an optimal level of service - before, during and post-transition. 4

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6 Euro Clearing Account Euro clearing in practize We recognise the importance of providing our customers with a Euro payments processing service which is simple, cost effective and highly transparent. ABN AMRO has developed a Euro Clearing Account which enables you to consolidate all of your Euro payments to/from counterparties worldwide through a single account, even if clients have not yet adopted SEPA payments. This significantly reduces the number of nostro accounts which you need to maintain, with a range of advantages: Nostro account management, such as opening/ closing and signatory maintenance, requires less administration and is better controlled; Reconciliation is a more straightforward process; Cash flow and liquidity visibility is greater; The most competitive local pricing and services can be obtained. We need to minimise the number of nostro accounts, to reduce cost and improve liquidity management.,, By taking advantage of ABN AMRO s Euro clearing services, financial institutions of all sizes are in a position to offer industry-leading Euro payment solutions to their clients. At ABN AMRO, we aim to provide our customers with unparalleled access to clearing channels, and we are connected to all major Euro clearing systems: EBA (EURO1 and STEP2) and TARGET2. As the Euro market expands, we will constantly review our network to meet our customers needs. We need to understand clearly what our clearing bank provides, both now and in the future.,, We use an advanced, automated routing system that enables us to customise routing instructions for each customer. This means that we route your clients payments using the most efficient and cost-effective method possible to complete payments successfully on the specified value date. We settle transactions via our correspondent bank network, EBA or TARGET. Euro payments directed outside the Eurozone are advised to the beneficiary bank and its Euro correspondent to achieve value date. ABN AMRO has been successfully processing Euro payments for many years, so we have established comprehensive cover party processing to automate this process, which is continually being enriched. As part of our Euro clearing capabilities, we also offer: 6 Comprehensive SEPA services; Competitive cut-off times; Book transfers; Clearly documented finality of payments, e.g. immediate, final settlement through TARGET2 and end of day settlement with EBA EURO1 and/or STEP2 end of day net settlement.

7 Dealing with exceptions At ABN AMRO, we recognise that there are times that our customers need additional help with their payments. We provide a variety of services to help you deal with exceptions, amendments and cancellations as smoothly as possible. We need to know we are in safe hands when payments do not go according to plan.,, Amendments and cancellations Unless we have a warehousing arrangement in place with our clients, we process payments on the day of receipt. If a customer needs to change or cancel a payment, we will use our best efforts to re-route or retrieve payments when it is possible to do so, and with the beneficiary s approval. In the case of amendments, customers typically send us a cancellation message (MT192 or MT292) followed by a new payment order. Back valuation In the event that payment is not received by the beneficiary on the designated value date, compensation is due. ABN AMRO can post back valuations up to five years back if both accounts are held with us. Straight Through Processing (STP) ABN AMRO has achieved an STP rate of 97% of Euro payments, a highly regarded statistic in the industry, by implementing sophisticated artificial intelligence technology and continuous refinement of our payment processing rules. We can set up specific arrangements for dealing with exceptions, with returned payments held in a suspense account, with automatic notification, enabling our clients to decide what action to take. Duplicate Payment Manager To avoid duplication of payments, we check all payments against those received within three business days, enabling intelligent identification of payment duplicates. This increases security and control over the payments process and avoids lengthy administration in retrieving payments. Euro Clearing 7

8 Adding value to the clearing bank relationship An effective relationship with a clearing bank is about more than simply processing payments. Financial institutions using our clearing services gain the benefit of comprehensive reporting and a range of value-added services. We need more than simply payments processing from our clearing relationship.,, Euro Liquidity Manager We pay interest on customers Euro Clearing Account, with credit interest rates linked to recognised market indices. Alternatively, we can offset costs against account balances. This reduces or eliminates explicit costs and means that surplus cash does not need to be invested. Flexible lifting fees With ABN AMRO s flexible lifting fee (FLF) option, our customers can build rules for tiered fee structures to provide a more personal service to each client. This allows highly customised fee structures to be applied, supported with comprehensive reporting. account with immediate availability. All information contained in the payment instruction is passed through to allow easier nostro reconciliation. Incoming credits are also reflected immediately in your balance position so that pending outgoing payments awaiting funds availability can be released promptly. Furthermore, to simplify cheque processing, ABN AMRO has a Cash Letter arrangement in place for our customers. Reporting Manager We provide comprehensive reporting tools to support your information requirements, using a variety of different delivery methods. This includes detailed endof-day-reporting, including the ability to customise the data to suit our customers information needs. Reporting is provided in a format which can be integrated seamlessly into our customers internal systems. Furthermore, statements, including interest statements are provided on all accounts either monthly or quarterly as required. Euro Collection Manager Incoming electronic credit transfers which are processed on an STP basis are posted immediately to your 8

9 We need full transparency over our payments, including liquidity forecasting and reconciliation capabilities.,, A full suite of SWIFT reports is available both intra-day and end-of-day, which can be customised to enable easy integration. SWIFT reporting includes: MT900 Confirmation of Debit, MT910 Confirmation of Credit; MT941 Interim Balance Report, MT942 Interim Transaction Report; MT940 Statements and MT950 End-of-Day Statements. Statements can be sent to multiple SWIFT addresses (Multiple Destination Advising) as frequently as required, including real time MT900 and 910 messages. Thresholds can be applied to enable notification of all transactions or those over a certain amount. Euro Clearing 9

10 Summary An effective relationship for Euro clearing requires a variety of elements to be successful, efficient, accurate and secure payments processing at the centre. We recognise that our ability to provide an additional range of services and reporting can enhance your ability to offer service excellence to your clients. Transparent, timely reporting, flexible exceptions processing and reliable service - whatever the market conditions - are key to what we do. At ABN AMRO, we are in a unique position to build long term relationships with our customers, based on trust and mutual objectives, to contribute to your success. 10

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12 Contact information ABN AMRO Correspondent Banking Telephone: Website: