Rabobank - Past and Present
4 International
The beginnings of
internationalization
Part 2
Deadline diary
1993 results -
satisfactory
performance
ISSUE 27/21 MARCH 1994
In the previous issue, Bert
Steketee recalled the early
days of the bank's
international activities. He
continues his story here...
'Around 1978, the main task we
had was creating a structure with-
in the bank that would enable us
to develop the kind of activities
we now call "international". This
meant we had to show prospec-
tive clients that we were adapt-
able and open for this type of
market.
'Following our first foray into the
world of international banking
through the jv with Bank of
America and which was ulti-
mately wound down, the next
step appeared to us to be the
establishment of an office in the
US. An executive board member,
Vlak, then recruited Hugo
Steensma, who by this time had
returned to the States, to start up
this new office that was to be lo-
cated in New York. In terms of
the bank's US activities, you
could say the rest is history. 'How-
ever, this was only our first step
towards real internationalization.
I'd like to mention Curacao here
because, in fact, it was the first
office we ever opened abroad.
But as the Netherlands Antilles is
so closely linked to Holland, it
didn't seem quite the same as
going into a totally new market.
'Our next step was to try and be-
come more operational in the
sense that we began establishing
an international payments ser
vice. We got onto Swift, we moved
our foreign currency activities
from Amsterdam to Utrecht.
This is when we really began im-
posing limits and putting in
operational management struc-
tures for forex dealing. This was
around 1980.
'I'd say it was at about that time
that you begin to see the begin
nings of international thinking at
the bank. We realized we were
the primary lender to the primary
agricultural sector and a lot of
those products were exported. So
we began asking ourselves: How
can we be in those places where
we can follow the trade flows?
This led us to what you could call
a "harbour" philosophy. In other
words, the feeling was we should
O
O
be in the major ports, such as
Hamburg, Rotterdam. We also
believed we had to be in the fi-
nancial centres, like London,
where flows of commodities are
traded.
'That philosophy was gradually
translated into policy in the early
1980s. It was put into practice by
people like Gijs van der Schriek,
who started up operations in
Singapore. In the US, Hugo
Steensma achieved great things
for the bank. He has great
charisma and is a marketeer par
excellence. He gave us a real
place in the American agri-
market.
'Looking back now, I'd say our
internationalization really began
in 1978 and slowly crystalized
over a period of about five to six
years. By 1984, we had the be
ginnings of a real network - of
fices in New York, Curacao, Ger-
many, London and Zurich - on
which to build. We've come a
heil of a long way since then.'
Raboband International
wants to keep you fully in-
formed on developments
within the international div-
ision. To do this, we need
your help. If you have any
items you think may be
interesting for other Rabo-
bankers, please send them to
us at UC-R 514. We work to
strict deadlines and those for
the coming year are listed
below.
Issue
Deadline
April
1 April
May
29 April
Jurie
28 May
July
1 July
August
30 July
September
26 August
October
25 September
November
24 October
December
20 November
On AAarch 4, the bank
announced its balance sheet
results over 1993. Profits
grew by 10 percent due to
cost control policies and to
higher CBS income.
In spite of an economically dis-
appointing year for the Nether
lands (growth hovered around
zero percent), the bank has pro-
duced respectable increases in
most of its activities. Lending
grew 9 percent; commission in
come was up 10.6 percent; gross
profit rose 10.4 percent; and net
profit reached 10.1 percent.
The bank's corporate credit
portfolio continued to expand,
expecially abroad, and lending
generated by the international
division now forms a 26.5-per-
cent share of total private sector
lending. However, the inflow of
funds entrusted was disappoint-
ing and the bank was obliged to
make greater calls on the inter
national financial markets in or
der to fund strong growth in
lending. The dragon bond issue
at the end of last year is just one
example of the bank's higher-
profile activities in the interna
tional financial markets. The in
ternational division's contribu-
tion to Group activities again
grew strongly from 12 to 14 per
cent of the total balance sheet.
Says Rik van Slingelandt (pho-
to): 'Our results are excellent.
We performed well above a
very aggressive budget. Although
treasury was a real winner for their
international division, all of the
other products, including those
newly introduced, showed sharp
improvements in results. All in
all, I'd say we have also achieved
a substantial improvement in the
quality of our results.'
The outlook for the whole Group
over the coming year is optimis-
tic. Policies already in place
aimed at further reduction of
costs and at controlled and quali-
tative growth will be pursued
vigorously and forecasts for this
coming year indicate the bank's
performance will continue to
improve.