CORPORATE FINANCE - THE KEY TO HIGH FEES 7 SUPERDEALS WHAT'S NewS Nummer 4 August 1995 international As margins on credit are squeezed ever tighter, more and more banks are looking for those lucrative corporate finance deals that can make all the difference to a bottom line. Internationals Jaap Slotema looks at how cor porate finance is defined within Rabobank and explains what the division But it's also natural for people to want to bump up their office's bottom line, so sometimes account managers don't refer their clients to other branches. We end up competing against ourselves. And that de- feats the whole object - we've got enough competition from the outside competition. This was a priority at the recent general managers' conference. We've now come up with a proposal for shadow accounting so that everyone's contribution and effort is shown somewhere. is doing to promote these activities in the network through recruitment, training and, most recently, a proposed shadow accounting system. You talked about the right people in the right place. Yes. That's essential, too. We're recruiting very seriously for a number of offices at present. You also mentioned the impor- tance of regional trade finance meetings.They are held in the Americas and in the Far East.Why not in Europe? The operations we have in European countries are very diversified. Just take Luxembourg and Guernsey. They're both private banking operations exclusively. The type of business we do in Italy is very different to the Belgian operation. If you look at Latin America, then you see all the offices there are pri- marily involved in trade finance. So it makes sense for them to meet and talk. In fact, given the diversity of our European oper ations, it would make more sense to bring London and New York together rather than, say, Italy and Belgium. But whatever the activity or operation, we still need networking throughout the organization. A problem that arises in one market and has been solved creatively can be useful for other co-workers in other markets. We have to keep talking to each other and using all the tools we have to main- tain and improve our lines of Communications. That's the only way we'11 get the type of business we need to become a global player in our markets - whether they're credit or corporate finance. in, and also real knowledge of fiscal and general law. This is because many of these products are fiscally driven. And if you don't have the know-how yourself, you need to know where to get it. So what exactly is the division doing to help create this environment? External training courses are important, but these are usually product-oriented. What you have to do is provide an en vironment in which people can develop Can you explain exactly what corporate finance is? In a nutshell, and I think the people in •jiat division would agree, every product hat is not traditional, such as straight credit, would fall under corporate finance. So, it would include Mergers Acquisitions, project finance, structured finance, and participations. The reason it has become so important is due to shrinking margins on lending. That's right. We need to gen- erate more fee-based income because the fees on traditional products are not particularly high. If I look at the foreign network, then we find that doc- umentary credits bring in a lot of fees. That's wonderful, but we're fortunate if we make US$ 1,000 on a DC, whereas fees of 100,000 are not uncom- mon in corporate finance. But there are other reasons. We want to be an international player. That means you have to provide this type of product, be cause clients expect it from a major global bank. Then there is the competition - they're also looking for this lucrative bus iness. How can we distinguish ourselves from the competition? Creativity. That is the most important in grediënt in corporate finance. Every Tom, Dick or Harry can lead a syndicate, but creating or repackaging a product requires creative thinking. The players who score Tiighest in corporate finance are the cre- Ptive people, the inventors, the ones who did it first. 1 believe that everyone is bom with some creativity and you can learn to get the best out of it. But first you need an indepth knowledge of the products avail- able, particularly in the country you work their creativity. The first step is to find very creative guy or woman and he or she will attract people who are either equally creative or have the potential to become that. It's all about networking. How can you assist in promoting that? Events like regional trade conferences are great opportunities for people to get to gether and build their networks. That is essential. We haven't opened up 50 inde pendent banks around the world which have their own show and are separate from the rest. We have a network of units. Waarom is corporate finance zo belang rijk voor de bank? Volgens Jaap Slotema van het directoraat Internationaal is dat omdat cor porate finance hoge provisie-inkomsten kan genereren in een wereld waar de marges op leningen steeds verder krimpen. Hij licht zijn visie op de positionering van het internatio nale netwerk toe.

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