A treasurer has to maintain relations not only with banks, but with clients as well. Primarily key accounts (key clients), regulatory authorities, financiers, stock exchanges, etc.. This is a critical function, afterall everything depends on customer satisfaction and customer experience.
Managing relationships with banks is a key task and a one that has to be performed on daily basis – unlike relationships with regulatory authorities. Both are adequately important, but one cannot talk to the regulatory authorities on a daily basis. It will not be fruitful, it may actually hurt the relationships.
Managing bank relationships is a different ball game. Some banks for instance bring powerful balance sheets and the ability to provide substantial amounts of finance at short notice. The ultimate goal to be kept in mind is to create a win-win situation for all stakeholders.
There is no rule on capping the maximum number of banks an organization has to deal with
Relationships are never stable – especially professional relationships. Hence never keep relationship with only one bank. This may not be a very effective strategy.
Banks are continuously comparing the return from the total business generated by the relationship with the cost of capital required to support it. If banks consider the returns are inadequate they will reduce support to the company. As such, a treasurer needs to be continually open to new potential relationships, and ever sensitive to the possibility of any existing relationship withering.
Most banks that participate in major financing, always say that their returns from traditional bank lending are insufficient to cover the cost of capital required to support their commitment. As a result, they are in constant lookout for ancillary business from the company to subsidize the bank lending activities effectively. This is a real problem for many treasurers since many companies do not have that volume of ancillary business