PwC and Euler Hermes set for split
The joint handling of Germany's guarantee scheme by Euler Hermes and PwC is over. In future, investment guarantees will be managed by PwC, with Euler Hermes taking sole responsibility for the export credit and united loan guarantee scheme.
On 1 July 2017, joint handling of guarantee schemes by Euler Hermes and PwC - in place since 1949 - will end. The reorganisation means nearly 100 PwC employees working for the export credit and untied loan guarantee scheme will be transferred to Euler Hermes.
Due to auditor rotation required by law, Allianz (of which Euler Hermes is a subsidiary) had to assign a new auditor. In February 2017, the supervisory board of Allianz proposed to appoint PwC as the new auditor succeeding KPMG’s previous role. “In order to avoid conflicts of interest, it is imperative that a strict operational and organisational separation exists between the company to be audited (Allianz) and its auditor (PwC). Consequently, the joint handling of the guarantee schemes by Euler Hermes and PwC under a consortium has to come to an end,” a Euler Hermes spokesperson tells TXF.
The partnership currently shares joint activities across both investment guarantees, export credit guarantees, and untied loans. Once split, investment guarantees will be solely managed by PwC, with Euler Hermes taking sole responsibility for the export credit and united loan guarantee scheme.
Euler Hermes and PWC will continue to act as service providers for the German government. Only the joint management of the individual guarantee schemes will be terminated.
“This is purely a reorganization,” adds the spokesperson. “The service level for the German government as well as for exporting companies and financial institutions will remain unchanged.”
Services, products, conditions, and processes will stay as they are. All PwC employees working for export credit guarantees and united loan guarantees will be transferred to Euler Hermes (about 90 employees). The reorganisation has been agreed with the German government.
While PwC has helped improve the German ECA scheme over the years, many senior financiers in the export finance community believe now might be the right time to discuss how to further develop the Euler Hermes offering, a strategy that they say appears to be working for UKEF and BPI France.
TXF's annual German Export Finance conference will take place in Frankfurt on the 19th and 20th September 2017. For more information visit:
http://www.txfnews.com/Events/Event/64/TXF-Germany-2017
