Cr» Administration DIVISION CORPORATE BANKING - STRATEGY FOR GROWTH credit division 10 WHAT'S NewS Issue 2 Febrjary 1996 o CREDIT COMMITTEE INPUT The credit analysis team is very involved daily with account managers and clients. Analysts also attend London Branch's own credit committee on a regular basis. 'This is a useful practice for both the analysts and the Credit Committee,' says Cunningham. 'A credit analyst usually acts as secretary to the committee. We don't want to overburden people, so we normally appoint two analysts to share the credit secretarial work for a six-month period. I know they sometimes see it as a chore. But both Mary, who is more like a partner than a depury and is a full-time member of the committee, and 1 believe the analysts gain really good insight and experience into how proposals are evaluated. Ultimately, it helps them do a better job.' CLOSER TO THE LINE On the administrative side, Gordon Harris and his team are responsible for processing and handling both credit and loan transactions. 'This means putting the deals on the books and then booking all of the transactions that happen within those deals. Gordon's group is very experienced, many of them have been with us for three or four years,' Cunningham says. 'In some banks, this might be part of "operations". But our structure puts them just that bit closer to the line, to the account officer. We think it not only works extremely well, but is extremely important for cooperation between the various teams.' LONDON'S LEGAL EAGLES The Branch currently has a two-person legal unit. 'That's Christine Hogg, who has been with the bank for almost three years, and Ton Rottjers,' Cunningham continues. 'He came over from Utrecht nearly two years ago. This kind of support, also the Dutch legal insight Ton brings in, is really essential with the kind of inter- network deals we're doing here. They report directly to Gijs van der Schrieck and are crucial members of the branchi team and make a real contribution to what we're all trying to achieve here - better results for the branch, but also for the whole network.' Backing up the growth in product range and complexity is a team of 40 in the administration division who manage all aspects of the infrastructure of the Branch through from premises to computing to the settlement and accounting for the deals. New head of administration, lan Armour, says,'I inherited a strong, experienced team, some of whom have been here since the day the Branch opened.The goal is to continue developing our skills and capacity to keep up to speed with the changing demands of the business.' SAFE HANDS Over the last six months, the Facilities and IT groups have managed the construction of a new 36-position dealing room with state-of-the-art systems. Now, they are focussed on raising thequality of services throughout the Branch. Administration managers are fully integrated into the business and are keenly aware that an efficiënt and professional support team with 'safe hands' is essential to maintain the confidence of marketers. This is crucial to support the marketers when they go out to get business,' says Armour. 'But it also reinforces the professional image of the branch in the marketplace.' With margins under extreme pressure, London Branch's corporate bankers have been obliged to come up with fresh strategies to beat the squeeze. David McWilliam puts us in the picture. David McWilliam 'We're looking at a situation here,' he says, 'whereby margins have fallen by anything from 30 to 50 percent last year in comparison to what we were seeing the previous year. Instead of getting around 30 basis points from quality corporates, we're now getting about 15. What that means in practical terms is that you have to do twice the volume of deals to get the same basic level of income and fees.' HIGHER VALUE ADDED That is the bad news, but McWilliam and his team have made their own good news. 'The nice thing is that we anticipated this,' McWilliam confirms. 'The squeeze on margins meant we had to alter our approach to our cliënt relationships. We recognized that and also the fact that we needed higher added-value products. So the bank made real investments in areas that could generate those products, such as structured finance, mergers and acquisitions, securitization. And it has started to happen for us. We started to get the kind of business we want, particularly in the last six months.' TOO MUCH MONEY Yet, the corporate bankers are still faced with how to continue to add value. 'Our results last year were generated by pure relationship-driven income, with the lion's share coming from interest income,' he says. 'But as I said, there is a real decline in average margins, not least because there is too much money and not enough real demand for it. Plus, no one is actually investing any money. They are all turning over existing borrowings. I'd be very interested to see the quality statistics on what is really a new deal and what is not.' KREDIETAFDELING De kredietafdeling is een integraal deel van het kantoor en wordt niet gezien als aparte 'back-office'. Daarom functioneren de kredietanalisten bij toerbeurt een periode als secretaris van de kredietcommissie. Hierdoor krijgen zij een beter inzicht in de manier waarop kredietvoorstellen worden geëvalueerd, zodat zij bij het opstellen van hun rapporten hierop kunnen inspelen. De kredietadministratie, verantwoordelijk voor het administreren van de leningen en alle transacties die hieronder plaatsvinden, is ook in deze afdeling ondergebracht. Door deze structuur worden kortere lijnen en een betere samenwerking bereikt.

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blad 'What's news' (EN) | 1996 | | pagina 10