Presidential PREROGATIVE GRANTS RAIBO BANKING LICENCE 16 international WHAT'S NewS Issue 1 January 1996 Since Brazil changed its constitution in 1988, no foreign bank has been granted a banking licence. Raibo do Brasil is now the exception. General manager Latin America, Teun de Boon sketches the current situation and explains why Raibo has been singled out for presidential favour. 'I think the whole banking community here in Brazil was just as surprised as we were when the president made an exception and gave us a licence,' he says. 'This is a very exceptional move because the regulations established by the 1988- constitution were essentially protectionist. Now, the government is looking at modifications and I believe they are actually using us as a test case. If we do well, then possibly they will start opening up the economy in general and the banking sector in particular.' BYTHE BOOK The Raibo CAN DO team is more than aware of the pressure this places on them. 'That we'11 do everything exactly by the book goes without saying,' confirms De Boon, 'but we're strongly in the limelight now and we have to make very sure that having received this preferential treatment, we do it even better than by the book. You know, there are always ways to get round regulations. A long time ago, we made a conscious choice not to use those routes because we knew they were frowned on by the Brazilian Central Bank. The result is that the BCB sees us as an above-board operation. And as a Triple-A rated bank, that's almost noblesse oblige.' SOUND TRACK RECORD De Boon says Raibo has always pursued a consultative relationship with the Brazilian financial authorities. 'Every time we want to do something, we talk to them first. They feel very comfortable with that. Apparently, we are the only bank, including domestic banks, which does that. We also have a sound track record here in Brazil. And I think the final factor in being granted a licence is that we're a cooperative bank. That's very much in vogue here, partly because an institution like ours is badly needed - as agriculture in Brazil is going through a terrible time right now.' TOUGH TIMES There are two major factors involved here. One is the Plano-Real, the bold economie RAIBOBANK DO BRASIL LTD. Av.das Nacöes Unidas 12.995 Edificio Plaza Centenario-9 andar Brooklyn Novo 04578-000 Sao Paulo-SP Caixa Postal (P.O. Box) 21.365 Tel: +55.11.505.2700 Fax:+55.11.505.2823 restructuring plan launched in July of 1994. 'It has had a major impact on agribusiness,' De Boon says. 'Subsidies were removed and the cost of credit has gone through the roof. We have the highest real interest rates in the world. People simply can't afford to operate. What must happen here is a total readjustment to approaching business without the support of government subsidies. It will take time and we can play a real role here.' ECONOMIC MIRACLE In spite of these problems, Plano-Real is working very well at general macro- economic levels. 'We've seen inflation fall from a massive 50 percent a month to a deflation of-0.8 percent last month and the year average for 1995 is around 1 percent per month. Getting inflation down was a major priority for the government and they've succeeded there. But we've also had to contend with the spill-over effect of the Mexican crisis. That has had some negative influences on the whole situation here in Brazil.' PRODUCT RANGE Given this backdrop, Raibo feels it is ideally placed to assist F&A corporates to get back on track. Officially, the Sao Paulo operation was a loan production office - albeit a very large one. Raibo has done close to USD 1 billion in trade finance business alone this year. 'The great thing about having the licence is that we can now offer clients a full range of products and services,' says De Boon. 'Our staffing levels will go up to around 50 by year-end. We're currently recruiting for treasury which also means we'11 have to beef up the back office. We'11 be entering the corporate finance, structured trade finance and M&A markets in a big way.' RAIBO ON THE MOVE To accommodate this expansion activity, Raibo do Brasil has also moved into new premises. The new address and contact numbers are noted above. ■■I BANKLICENTIE BRAZILIË Sinds de wijziging van de Braziliaanse grondwet in 1988 is geen enkele bank er in geslaagd een banklicentie te verkrijgen. Raibo do Brasil is de grote uitzondering hierop. Dit dankzij de goede contacten met de financiële autoriteiten, de coöperatieve structuur en de tripple A-status.

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blad 'What's news' (EN) | 1996 | | pagina 16