Takeda's Internal Growth in Asian Pacific Banking Sector

In a significant move towards financial streamlining, Takeda Pharmaceutical Company has implemented a series of strategic changes, most notably the establishment of an in-house bank (IHB) and the introduction of a Cash Management on Behalf of Others (COBO) system.

The IHB, currently boasting over 100 participants globally, includes entities from Europe, US, Japan, Canada, Mexico, Australia, New Zealand, and Singapore. This global network has been instrumental in Takeda's successful consolidation of its financial operations, reducing the number of bank accounts from over 1,000 to less than half, following the acquisition of Shire.

The IHB service level agreement encompasses cross-border intercompany lending and borrowing, providing a more efficient and cost-effective means of managing Takeda's vast financial operations. The advantages from a governance and compliance perspective are evident, as central treasury now has control over payments and liquidity.

The IHB project in Singapore, which kicked off in mid-2023, includes a central Singapore dollar account at Deutsche Bank Singapore. The new POBO structure in Singapore went live in December 2024.

Takeda's COBO distribution is expected to have the most significant impact on the Asian and North American continental regions over the next 5 to 10 years. The implementation of COBO allows for further cash centralisation, a move that has been on Takeda treasury's agenda going forward.

The IHB has led to a significant reduction in international bank fees and transaction costs, and it provides greater visibility and access to cash around the group, which is particularly critical with rising interest rates. Furthermore, FX exposure management is easier to identify and manage with the IHB.

In addition to the IHB and COBO, Takeda has also been focusing on integrating fraud protection into the payment process and the broader adoption of COBO globally. The company plans to roll out POBO for Japan, leverage increasing standardisation of payment formats to centralise POBO further, and continue focusing on these initiatives.

However, it's important to note that many markets in APAC have tax requirements, capital controls, and other regulations in place that prevent a free flow of cash and payments cross-border. These challenges are being addressed as part of Takeda's ongoing efforts to optimise its financial operations.

Takeda's strategic financial initiatives have been complemented by its commitment to growth in the Asia-Pacific region. The company has established its regional headquarters for growth and emerging markets in Singapore, which hosts its only biologics drug substance manufacturing facility in Asia.

In conclusion, Takeda's strategic financial initiatives, including the IHB and COBO, have played a crucial role in streamlining the company's global operations, reducing costs, and improving visibility and control over its financial operations. These initiatives, along with Takeda's commitment to growth in the Asia-Pacific region, position the company well for future success.