As good as the best
band Issue 22/October 18, 1993
Rabobank's central banking division is currently in the process of
improving efficiency and the quality of its service through exten-
sive restructuring in order to meet targets established in the
Strategie Action Plan. How will the new structure affect foreign of
fices? Raboband International reports.
Singapore in dragon
bond issue
People
Dutch industrial relations
KV&lfc robably the biggest change for
bhP foreign offices will be that they
could end up dealing with diffe
rent people when they contact the central
banking division (CBD),' says Hans van de
Weerd Sr. of the international department.
'In addition, the aim of the restructuring pro
gram is to streamline the bank's operations
so that we are more efficiënt all round. So
they should see a change there, too.'
Competition So what is actually hap
pening in Utrecht? Why is this massive re
structuring needed, and what will it mean for
staff in the CBD? The current Strategie Ac
tion Plan, which was designed to improve the
bank's performance by increasing net profits
to 10 percent, has proved too optimistic.
The main reason is increasing competition
as well as ever-rising costs. In the light of
these factors, the bank's board decided
measures were needed to both reduce costs
and improve quality in order to achieve the
best possible results, given difficult circum-
stances.
High costs A commission was estab
lished in the spring of this year with the aim
of examining the CBD's costs and producing
recommendations. Known in Dutch as the
Kijk op Kosten (KOK - literally: looking at
costs) commission, its task was not only to
analyse costs, profit and losses, but also to
compare these with those of banks of simi-
lar size and status. In its final report, the
commission concluded that an NLG 85-mil-
lion reduction in costs was a realistic option.
It also indicated how these cuts could be
made, ie. through increases in quality and
greater efficiency.
Emphasis The response was an action
plan entitled 'As good as the best'. In recent
weeks, staff in all departments of the CBO
were given presentations by their managers
on the KOK analysis and plans were made
to implement the commission's findings.
The emphasis is on reducing costs and in
creasing the quality of work as both are con-
sidered essential for the further develop-
ment of the CBO. Staff were informed that
improvements in quality were to be achieved
through the restructuring of business pro-
cesses. Increased cliënt and market-orien-
tation are both point of departure and goal
here. According to the commission, 'some
business processes have become un-
necessarily complicated over time'. And staff
were asked to look criticaily at their own par-
ticular working environment.
Consultation According to the com
mission, the NLG 85-million savings could be
made by reducing automation costs (40 per
cent), personnel costs (40 percent) and
other costs (20 percent). The KOK analysis
was submitted to the Board in July and it in-
structed the various directorates to examine
how it could be appiied to their areas of oper
ations. As a result, individual managers then
began examining their own department to
see how the proposed cost reductions can
be made. One proposal is the creation of a
new operations directorate which would com
bine all the so-called 'back-office' oper
ations. However, all proposals have still to
be submitted for advice to the employees'
council, the Ondernemingsraad (see box),
which according to Dutch law, has no little
influence in major decisions of this kind. If
these proposals are given the go-ahead, the
individual directorates can then begin de-
veloping further action plans.
Consequences Clearly, the implemen-
tation of such a cost-cutting plan will have
consequences for each and every CBD staff
member. However, the bank's policy has al-
ways been to be open and honest with per
sonnel, and all employees are being asked
to look at work processes criticaily. This
could lead not only to changes in these pro
cesses but also to the disappearance of par-
ticular jobs.
Any execution of plans will be carefully
monitored in each department through dis
cussion during regular work meetings. If
staff have problems, these can be discus-
sed with their manager who will work on so-
lutions with the CBD's personnel and training
department.
Challenge As a prominent employer in
the Netherlands, Rabobank has both a
collective labour agreement and a social
plan (see box). Says board-member Frank
Schreve: 'During the execution of proposed
restructuring within the directorates, the so
cial plan which Rabobank has agreed with
trades unions will be taken into account. The
adjustment of the Dutch sections of the CBD
is actually in line with cost-reduction activ-
ities elsewhere in the organization. The
Strategie Action Plan, which is aimed primar-
ily at equipping us to take advantage of
various market opportunities, demands
qualitatively excellent service at stronly
competitive rates. Achieving this wiil be a
great challenge. And it is clear that sound so
cial guidance of the "As good as the best"
action will also make great demands on all
ofus.'
For the first time in the bank's history,
this year Rabobank will be issuing so-called
dragon bonds which will be listed on Hong
Kong and Singapore's stock exchanges.
'The debut issue will be followed by others,'
says Arthur Arnold, chief of the financial mar
kets division. 'Each will be worth at least
US$ 200 million and the proceeds will be
used to develop our activities in the region.'
Says Singapore's GM Willem van Lynden
(photo) van Keppel: 'The Asian market has
grown tremendously and has high liquidity.
And we believe the capital market here will
be the most exciting for the next 25 years.'
Dragon bonds are debt instruments issued
in Asia (excluding Japan).
The first bond issue will be managed by Gold
man Sachs and will be denominated in US
dollars with three to five-year maturities and
interest rates will be linked to US treasury
bonds. In the future, issues may be de
nominated in Hong Kong dollars or yen.
Brazil John Clark Sepülveda joined Raibo do
Brasil as senior account manager on August
1. He comes to the bank from an American
Bank in Brazil.
Netherlands Following a four-year period as
account manager at Rabobank Deutsch-
land's Munich office, Martin Bakker has
now joined the management of Rabobank
Vlissingen. His new appointment became ef-
fective on August 1.
North America Rectification Due to a com-
munication slip-up, Robert Bucklin of the
Dallas office's name was misprinted in the
last issue. Our appologies to Mr Bucklin.
In the Netherlands, employer/employee relationships are subject to very stringent
regulations. Trades unions representing staff are in regular consultation with employers.
Both parties, known in the Netherlands as the 'social partners', cooperate in the for-
mulation of a so-called 'collective labour agreement' which formalizes conditions of work,
pay, etc. Furthermore, major employers and unions tend to agree 'social plans', which
are designed to facilitate rationalization and restructuring processes while looking after
the interests of all concerned.
In addition, employees' interests are also promoted by a so-called ondernemingsraad
(OR), which translates loosely as employees' or works' council. All organizations with more
than 35 staff are obliged by law to set up an elected OR. This council works closely with
the employer on important interorganizational developments by representing the em
ployees' point of view.
