The New York
branch
4
Rabo
band
April 9, 1981, Rabobank began a new stage of international ex-
pansion by opening the New York Branch. The bank located in one
of New York's premier buildings on prestigious Park Avenue, the
mid-Manhattan hub of the New York banking community. The
broad avenue approaching Grand Central Station hosts fashionable
shops, churches, museums, gardens and worid famous hotels like
the Waldorf Astoria. Minutes away, walkers can ascend the
Empire State building, visit the United Nations, give their regards
to Broadway or watch skaters at Rockefeller Center. A ten minute
ride by subway gives access to the Wall Street based financial gi-
ants of New York, a walk across the Brooklyn Bridge, or a visit to
South Street Seaport - a living reminder of the days when sturdy
Dutch ships and captains provided the core of a vigorous com-
merce based on ferries, sail and steam transcontinental shipping.
Issue 2/September 23, 1988
Staff Controller's, Risk Management, Account Management and Corporate Services Units.
Little knowing they would number
over 100 by 1988, the bank's orig-
inal 36 employees started with a
three-part mandate:
Serve member bank and central bank
customers doing business in the US, as
well as US companies with a presence in
Holland.
Establish a presence for the bank in the
US money and capital market and the
world's US dollar clearing center.
Make a profit, expanding on the bank's
strengths in international agribusiness.
The environment they faced was daunt-
ing: a country with a population of 250 mil-
lion where potential customers located in
San Francisco were as far away as
Amsterdam; a banking sector regulated
not just by Federal law but by 50 indepen
dent states, often as culturally diverse as
the countries of Europe; an established
competition of 14,000 US banks, 450
foreign banks and a variety of other so
phisticated financial and investment insti-
Multiflora Greenhouses Inc. a cliënt of the New
York Branch.
tutions moving into traditional banking ser
vices. An environment, in short, where
costs could be counted on to rise as mar-
gins narrowed.
Agribusiness The attraction lay in the
fact that Holland was the second largest
investor in the US and the second largest
buyer of US agricultural commodities. And
while the competition was strong, there
were very few banks with a concentration
on agribusiness and practically none with
focus on international agribusiness.
The challenge was to assist their cliënt
base with their increasingly international fi
nancial needs, and to find a way to do it at
a profit. To use creativity to develop high
quality products and services to meet
cliënt needs and to specialize, choosing to
emphasize those things they could do bet
ter and those things they could do new,
rather than trying to be all things to all
people.
The result was a strategy that empha-
sized linking specialized knowledge of agri
cultural financing and international trade
and investment financing with detailed un-
derstanding of the international supply and
demand relationships of agricultural com
modities. Building a specialized industry
expertise not available elsewhere. With
this knowledge the bank could offer its
clients, in addition to its historical commit-
ment to this sector, sophisticated assess-
ments of risk and creative solutions to
their financial needs.
Seven years later, the Branch, with
over US$ 2,000,000,000 in assets, finds
itself with a major involvement in most ma
jor sectors of agribusiness: poultry pro
cessing from slaughter to pre-cooked
chicken wings; coffee, sugar, cocoa im-
porting and processing; grain merchandiz-
ing. Whether oranges, grapes, plums, apri-
cots, nectarines, beef farms, turkey farms
or fish nurseries, feed lots, processing or
storage facilities, the Branch has devel-
oped a cliënt base and became a principal
lender.
Funding Of equal importance has
been its success in developing alternative
US dollar funding sources for the Rabo
bank organization and the increasing fund
ing of the expanding US loan portfolio. The
development of very successful commer
cial paper and medium term note pro
grams now allows the bank to issue notes
as small as US$ 100,000 for periods up
to 15 years at a fixed rate. Investments in
high quality paper such as US Treasury
notes and government guaranteed paper
provide an important and profitable outlet
for the funds generated. The significance
and potential of these treasury activities
are reasons the Branch was initially locat
ed in New York, the financial center, rather
than in a mid-western location which might
have been chosen had the bank focused
only on financing agribusiness.
Future opportunities Looking ahead
from 1988, the opportunity is still im-