TREASURY PLUS

Increase your investing power by up to 83.33%.

Increase your investing power by up to 83.33%.

Enhance your investment potential with Treasury Plus via a line of credit from the eligible collaterals* in your Currency Manager Account.

Features
  • Credit line up to 83.33% of the total eligible pledged collaterals* value in your Currency Manager Account
  • Leverage up to 5 times of your initial funds
  • Invest the additional capital from the credit line in Premium Account and/or foreign exchange investment for higher potential returns, but the risk of leveraged investment can be substantial
  • A revolving loan facility that allows you to withdraw and repay the loan anytime within office hours through our staffs
  • Flexible choice of 9 major loan currencies
  • Please click here for Key Facts Statements of Treasury Plus
  • Click here for latest Risk Disclosure for Portfolio Financing services
How Does It Work?

Collateral for pledging

Eligible pledged collaterals* in Currency Manager Account

9 loan currencies available

HKD, USD, AUD, CAD, EUR, GBP, JPY, NZD, CHF

Invest the additional capital from the credit line in Premium Account and/ or foreign exchange investment for higher potential returns

*
Eligible pledged collaterals include the total available deposit and investment in designated currencies (Time Deposit, Call Deposit and/ or Premium Account) in Currency Manager Account excluding "In-trust-for" Account Deposit, Hold-deposit, Pledged-deposit, Gold Manager, Gold Premium Investment, RMB Deposit, Market Linked Account and MaxiSavings.
Illustrative Examples

Difference between ordinary investment and leveraged investment by Treasury Plus

Illustrative Example Ordinary Premium Account Investment Leveraged Premium Account
Investment
Leveraged Foreign Currency
Trading
Principal USD 100,000 USD 100,000 USD 100,000
Additional Capital from
Treasury Plus
Not applicable USD 200,000 USD 200,000
Total Fund USD 100,000 USD 300,000 AUD 375,000
(USD 300,000)
Investment USD / AUD Premium Account AUD Time Deposit
Strike Price (USD/AUD) 0.8 USD : 1 AUD
Tenor 30 Days
Investment Interest Rate 6% p.a. 0.25% p.a.
Loan Rate Not applicable 0.67% p.a.
Example 1 (0.805 USD : 1 AUD)
Interest Earned USD 500
( USD 100,000 * 6% * 30 / 360)
USD 1,500
(USD 300,000 * 6% * 30 / 360)
AUD 78
(AUD 375,000 * 0.25% * 30 / 360)
Principal & Interest Earned USD 100,500 USD 301,500 AUD 375,078
Interest Cost from
Treasury Plus
Not applicable USD 112
(USD 200,000 * 0.67% * 30 / 360)
USD 112
(USD 200,000 * 0.67% * 30 / 360)
Net Return USD 500 USD 1,388 USD 1,826
(AUD 375,078 * 0.805 -
USD 300,000 - USD 112)
Annualized Return Ratio 6% 16.7% 21.9%
Example 2 (0.795 USD : 1 AUD)
Interest Earned USD 500
(USD 100,000 * 6% * 30 / 360)
USD 1,500
(USD 300,000 * 6% * 30 / 360)
AUD 78
(AUD 375,000 * 0.25% * 30 / 360)
Principal & Interest Earned AUD 125,625
(USD 100,500 / 0.8)
AUD 376,875
(USD 301,500 / 0.8)
AUD 375,078
Interest Cost from
Treasury Plus
Not applicable USD 112
(USD 200,000 * 0.67% * 30 / 360)
USD 112
(USD 200,000 * 0.67% * 30 / 360)
Net Loss - USD 128
AUD 125,625 * 0.795 -
USD 100,000)
- USD 496
(AUD 376,875 * 0.795 -
USD 300,000 - USD 112)
- USD 1,925
(AUD 375,078 * 0.795 -
USD 300,000 - USD 112)
Annualized Return Ratio -1.6% -6.0% -23.4%

Note:

  • Figures shown in the examples are referenced as of September 6, 2017.
  • The above illustrative examples are hypothetical and provided for illustrative purposes only. The scenarios are not based on the past performance of the foreign currency. The Bank is not making any prediction of future movements in the foreign currency by virtue of providing the illustrative example. It does not represent all possible outcomes or describe all possible factors that may affect the return of an investment. The return ratio and loan interest rate are for illustration only, and do not constitute actual and/or future performance and loan cost.
  • The indicative interest rates are for reference only and are not guaranteed. All interest rates are subject to changes every day without prior notice. Customers can inquire on the latest interest rate through Citiphone and Branch or visit the Citibank website. For enquiries, please contact your Relationship Manager or call our Investment Service Line (852) 2860 0183.
Latest Interest Rates
  • Comprehensive Market Insight Stay up-to-date with market information.
  • Time Deposit Offer Deposit funds to enjoy preferential interest rates.

To borrow or not to borrow? Borrow only if you can repay!

Important Disclaimer:Important Disclaimer:

  • The tenor of the Treasury Plus and the Premium Account are different. The Bank only offers overnight tenor for Treasury Plus. The interest rates for loan may vary daily without notice, customers’ interest costs may therefore also vary. This may affect the net return on investments. Customers can inquire latest interest rate by calling the Bank’s hotline or website.
  • The loan interest of Treasury Plus will be debited to respective loan accounts on the last calendar day of each month. If the last calendar day is not a bank business day, interest will be debited on the first succeeding business day (includes interest incurred in-between).
  • Customers’ loan currencies in Treasury Plus can be different from investment currencies in Premium Account. In such a case for Treasury Plus, customer will be subject to more significant currency risk.
  • Foreign exchange rate fluctuation of the collateral currencies may reduce collateral value and may induce margin call and/or forced sell.
  • Unless after liquidation the outstanding position will not reach any margin call and forced sell level, customer-initiated liquidation of the pledged product will not be permitted if the liquidation proceeds are not for loan repayment.
  • Investment products are not eligible for U.S. persons and might only be applicable to limited jurisdictions.
  • The facility is subject to our annual review whereupon we will re-assess based on our annual review criteria (as determined by us from time to time) which may include, but are not limited to: your (a) credit history, (b) bankruptcy check, (c) net worth and (d) customer segment (Citigold or Citigold Private Client). You may be required to provide additional information or documentary proof upon request. We may renew the Facility (with the same of different Facility Limit and on the same or different terms) or terminate the Facility.
  • The bank reserves the rights to liquidate any or all of the eligible deposit or collateral held with the bank and/or set off any credit balance in any of your accounts (or your joint accounts with other person(s)) against any outstanding balances and terminate Treasury Plus services.

Risk Disclosure:Risk Disclosure:

Leverage Risk

The use of leverage means that relatively small price movements will have a multiplying effect on customers' corresponding gains or losses and the degree of investment risk customers face is greatly increased. Thus, the risk of loss in leveraged investments via Treasury Plus can be substantial. Customers may sustain losses in excess of their margin funds. Placing contingent orders, such as "stop loss" or "stop limit" orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders.

Customers may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, their positions may be liquidated. In the event that the market deteriorates rapidly beyond the margin call level and reaches the forced sell level, the bank reserves the right to close out all or part of the outstanding positions without notice and without any margin calls. Customers will remain liable for any resulting deficit in their accounts. Customers may be engaged in leveraged investments in Premium Account and/or other foreign exchange currencies through pledging of deposits (including local and foreign currencies) and/or Premium Account. Minor market fluctuations (including but not limited to fluctuations in currency exchange rate) may multiply customers' losses and lead to substantial deficit. Customers may sustain losses in excess of their collaterals and have resulting deficits in their accounts.

Price Risk

Treasury Plus is highly speculative and risky and is subject to the risk of market fluctuation. The value of customers' holdings may be reduced as a result. Customers should have sufficient net worth to be able to assume the risks and bear the potential losses of leveraged investments.

Interest Rate Risk

Our Bank only offers overnight tenor for Treasury Plus. As the interest rates for Treasury Plus loan may vary during the period of investment, the interest costs may therefore also vary. This may affect the net investment return.

Liquidity Risk

Premium Account cannot be terminated before maturity. For customers who pledged Premium Account as collateral, any loan repayment or top up requirement before maturity will have to be covered by other pledged deposit and/or additional funds. If customers do not have sufficient pledged deposit and/or fail to bring in additional funds, the Bank has the discretion to terminate the Premium Account before its maturity date to repay the Treasury Plus loan outstanding. Such early termination may be made at a loss to customers and they will remain liable for any resulting deficit in their accounts.

Credit Risk

The approved line amount granted is dependent on the quantum of finance allowed for each margin deposits and/or Premium Accounts. The quantum of finance is subject to change by the Bank without notice.

Currency Risk

If the currency of the loan is different from the currency of the underlying investments and/or deposits, foreign exchange rate risk implications may affect the value of the loan, underlying investments, and/or deposits. Relatively small movements in the exchange rate will have a multiplying effect on customers' corresponding gain or loss and resulting in the possibility of margin call and forced sell.

Over-the-counter Risk – For Treasury Plus / Foreign Currency Leveraged Investment / FX Margin Trading, the Relationship Manager and/or Treasury Specialist / Treasury Portfolio Specialist / Investment Specialist / any other licensed sales persons from Citibank explained that such products are being sold over-the-counter (“OTC”) and the implications of which are:

-
Citibank may act as the counterparty to the customer’s transaction and the customer may be subject to Citibank’s credit risk;
-
There is no centralised source of pricing and the price of the transaction will be determined by Citibank or negotiated with the customer;
-
The transaction in OTC products may involve greater risk than investing in exchange traded products because there is no exchange market on which to close out an open position.

Marked-to-market Losses

Customers' leveraged position is marked-to-market daily and they may be called upon at short notice to deposit additional funds to avoid a forced sell of their leveraged positions.

Margin Call

The margin call level is set at present margin level equal to or exceeds 100%, computed as the ratio of (a) the aggregate of the outstanding amount(including accrued interest) at any time under the revolving credit facilities or otherwise under this account to (b) the aggregate of (i) the value of the eligible deposits (including for this purpose, accrued interest and the value of the investments under Premium Accounts) maintained with the Bank under this account and (ii) the value of the deposits (including accrued interest) to be established or Placements to be made with the Bank from the proceeds of any part of such advances, multiplied by such percentage as may be prescribed by the Bank from time to time (presently, 83.33%) (the “loan-to-security” ratio). If margin call is triggered, customers need to top up the shortfall margin to below 100% within 2 business days. Positions may be liquidated at the discretion of the Bank if a margin call is not complied within the stipulated time period. The margin call level is also subject to change by the Bank without prior notice and the Bank has no obligation to notify customer of the aforesaid event, therefore it is customer's duty to monitor the same.

Force-sell

The forced sell level is set at present margin level equal to or exceeds 103.44%, computed the ratio of (a) the aggregate of the outstanding amount(including accrued interest) at any time under the revolving credit facilities or otherwise under this account to (b) the aggregate of (i) the value of the eligible deposits (including for this purpose, accrued interest and the value of the investments under Premium Accounts) maintained with the Bank under this account and (ii) the value of the deposits (including accrued interest) to be established or Placements to be made with the Bank from the proceeds of any part of such advances, multiplied by such percentage as may be prescribed by the Bank from time to time (presently, 83.33%) (the “loan-to-security” ratio). All or any part of customers' margin deposits and/or securities may be realized for settling all or any part of their outstanding without notice. In the event that the market deteriorates rapidly beyond the margin call level and reaches the forced sell level, the bank reserves the right to close out all outstanding positions without notice and without any margin calls. The forced sell level is also subject to change by the Bank without prior notice.

Loan Currency Switching Risk – The Relationship Manager and/or Treasury Specialist / Treasury Portfolio Specialist / Investment Specialist / any other licensed sales persons from Citibank explained that customers may be exposed to risks associated with loan currency switching:

-
Customers may suffer loss from switching loan currency if the new loan currency appreciates against their previous loan currency, even if the interest rate on the new loan currency may be lower. In addition, the interest rate on the new loan currency will vary in line with the prevailing benchmark rates and may end up higher than the interest rate of the previous loan currency.
-
Margin call can be triggered by loan currency switching due to FX fluctuations. The ability to successfully execute loan switching is subject to sufficient margin in customers’ portfolios. Customers shall be responsible for any consequences resulting from a failed loan switching execution due to insufficient margin in customers’ portfolio.
-
Different interest rates may be charged on different loan currencies, customers’ returns may be affected by the potential interest rate differentials.
-
FX conversions quoted to customers for loan repayment includes Citibank’s spread. Funds will be debited from customers’ deposit account to service the loan interest and/or loan principal. If the currency of customers’ deposit accounts is different from the currency of their loan, FX conversions will be carried out to convert customers’ funds in the deposit accounts to service the loan interest and/or loan principal.
-
Customers can track their loan outstanding balances from the Monthly Consolidated Statements. Transaction details of the loan currency switching can be accessed from customers’ FX Transaction advices.

Loan Interests

Treasury Plus is a revolving loan where interest is accrued daily. All the interest charged and other sum payable will be due and payable at any time forthwith on demand by the Bank.

Customers should seek independent advice before making a commitment to apply for Treasury Plus. In the event that customers choose not to seek independent advice, they should carefully consider whether such leveraged investment account is suitable in the light of their own investment objectives, financial position and risk profile.

Important Information:Important Information:

  • The investment decision is yours but you should not invest in the Treasury Plus unless the intermediary who sells it to you has explained that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
  • Treasury Plus involves leveraged investment and is subject to a number of risks.
  • Leveraged investments carry a high degree of risk in which a relatively small market movement will have a proportionately larger impact on the funds you have invested or will have to invest. An investor may sustain a total loss of initial margin funds and any additional funds deposited to maintain his/her position. If the market moves against his/her position or margin requirements are increased, an investor may be called upon to pay substantial additional funds at short notice to maintain his/her position.
  • Premium Account is not a bank deposit and involves risks including the possible loss of the principal amount invested. Please refer to relevant brochures for the details and risks involved for Premium Account.
  • Investors should not rely on this document/content of this leaflet alone to make investment decisions. They should also read other relevant documents for details including the risk factors. If you have any enquiries, please seek independent professional advice prior to subscription.
  • Past performance is not indicative of future performance.
  • Investors’ investments are subject to the insolvency and credit risk of Citibank (Hong Kong) Limited and/ or Citibank, N.A. (as the case may be) (the “Bank”). There is no assurance of protection against a default by the Bank in respect of payment obligation. In case of insolvency of the Bank, you may lose your entire investment irrespective of the performance of the foreign currency market, the terms of the Premium Account and Treasury Plus.
  • This material is issued by Citibank (Hong Kong) Limited, a licensed bank regulated by the Hong Kong Monetary Authority.