New status for CBS? Bank notes WHAT'S NewS Issue 2 February 1996 cbs organization 15 In his traditional New Year address to the staff of Rabobank Nederland (RN), chairman Herman Wijffels had a lot to say about CBS, where we are, and importantly, where we're going. He announced the bank is currently looking for ways to find a corporate structure for CBS which reflects it activities. 'There appears to be a lot of speculation on the position of CBS,' Wijffels began. 'People are talking about independence, but that is the wrong word. I'll say something about that in a moment. But Hjrst let's look at how CBS is doing.' He Tnen talked personnel through the results, describing 1995 as a good year. THREE TO ONE Wijffels pointed out we had not yet achieved the famous 1 O-percent target. 'But 8 percent is certainly a major step forwards compared to the previous year. The number of staff has also grown,' he noted. 'Especially abroad. There are now 2,500 employees in CBS: 900 in Holland; 1,600 outside the country. And that is shifting fast. We will soon be in a situation where for every domestic employee, there are three abroad. This means CBS will increasingly take on a very strong international character. It is primarily an international operation also with an ^peration in Utrecht.' UNRAVELLING PROCESS 'lt is partly against this backdrop that we have begun to think about the role and position of this part of our organization within Rabobank Nederland as a whole. We call this the unravelling of the various functions of our various activities within Rabobank Nederland. You could say that in recent years Rabobank Nederland has developed into a cluster of strongly diverse activities. Each has its own specific focus and also the specific professionalism necessary to do their jobs well. Given this perception, it is time to differentiate those various functions more appropriately and thus define them more accurately. PROFIT-DRIVEN GOAL IJCijffels explained that a similar process rad already taken place in the support units. An internal "differentiation" was carried out and Rabofacet was created. 'Something along those lines is being considered for CBS,' he said. 'The figures show CBS is on its way to maturity. It has gradually grown into a position whereby it can generate many of its own solvency requirements. It has also achieved such a level of activity that this should be expressed in the its structure. For example, in contrast to the member banks, CBS is profit-driven. Although clearly this remains within the strategie policy guidelines of the organization as a whole.' STILL IN THE FAMILY 'So we are looking to see if there is a corporate structure which would clarify and facilitate the "differentiation" of CBS. Initial examination shows this will not be easy. For example, it appears that many contracts could be terminated if the legal partner changes. We, as CBS, have numerous contracts around the world. If that should change, we could encounter problems. In short, there are a number of practical matters here. But the basic idea remains a "differentiation" of CBS activities, if possible also through a legal body, but clearly still in the family. It cannot be done any other way, because matters such as the Triple-A rating could be seen in a very different light by the rating agencies. So the message is: stay close to the parent, but in a "differentiated" position.' Lackof space in the New Year issue meant Bank Notes skipped a month, but we're back on track now. Last time, we looked at the role of the member Rabobanks in defining policy and goals for the whole organization. We'll expand here on what that role has meant for CBS. Rabobank Nederland is the central organization originally established to provide both services and expertise to member banks. CBS is one part of Rabobank Nederland, the others are the so-called Work area member banks (it loses a lot in translation), Interpolis, and the combined support units. In fact, when Rabobank went international CBS as such didn't actually exist.The strategy behind opening presences outside the Netherlands was aimed almost exclusively at providing the bank's Dutch clients with services abroad and to strengthen trade finance activities. The Dutch have always been a big trading nation; they export around 70 percent of GDP and import a similar percentage. So clearly a lot of Dutch companies were out there doing cross border business. I n other words, the international expansion stragegy of the early 1980s was defined mainly by member-bank needs and requirements. Because of the trade finance focus, the initial thinking was to open presences in major ports and financial centres - New York, London, Singapore. In Europe, the network of strategie alliances with major banks was built up with the sole aim of providing member-bank clients with similar services in countries such as France, the UK, Spain and so on.lf you're a recent arrival in the bank, no one could blame you for thinking that strategy has been redefined out of all existence.The international offices generate considerable contributions to the bank's total bottom line. They fund themselves.and even work on funding for other offices. They do major deals.They have their own specific markets and areas of expertise. Yet even though we may have moved a very long way in the brief period since the first 'foreign' office was opened,the reminder of where Rabobank's international expansion came from is usually still there - the Dutch Desk. And even if, or rather when, the developments sketched by Herman Wijffels in his New Year address come to fruition.the Dutch Desk will certainly still bean integral part of CBS operations. Not least because Dutch companies will always be high in the cross border trade stakes and need the services of a top bank abroad. Look out for an iniation into the mysteries of the Centrale Kringvergadering (literally: central cirde meeting, again it loses a lot in translation) next month.

Rabobank Bronnenarchief

blad 'What's news' (EN) | 1996 | | pagina 15