0 ireland 10 WHAT'S NEWS Issue 4 April 1996 TREASURY DEVELOPMENT Treasury The Dublin treasury was set up just over one year ago, with one dealer. Today, it has a complement of 10. It has a crucial role to play.The treasury agency service is, of course, an important one for corporates. Yet it only represents part of Dublin's activities. 'At the end of the day,' confirms head of treasury Fergus Murphy,'all of our assets.our liabilities, all our loans, our deposits and all the foreign exchange we're doing for the Group here and for the network pass through here. And that is a pretty sizeable amount. If you look at the deals done by Lynda Carroll and Paul Whooley in structured finance and banking, you see they're dealing with big ticket deals - USD 50 to 100 million.We also run a very large cash book for the assets put in by DLL business. So our balance sheet has grown rapidly. In 1994, it was around NLG 1 billion, now its increased five-fold.'The dealing room is still comparatively smalfbut it's growing. The aim,' says chief dealer Malachy Taaffe, 'is to have around 15 dealers including the DLL people.That would bring us up to about the size of the biggest international banks here. One of our main focuses is domestic corporates. Even though we're not yet up to size, we're already in the process of developing relationships with corporate clients. Eileen O'Sullivan of treasury sales and corporate banker Deirdre Hannigan are tackling that particular market and we hope that we will be able to offer treasury products along with lending and other services. While Taaffe and his co-workers are not involved in 'rocket- scientist stuffwe dearly have a very interesting mix of products here. We started from scratch with the team only a year ago, but we've definitely come a long way in that time.' The intensity of cooperation between the three sister companies is perhaps most apparent when you speak to Jan Frederix. 'There's a lot more to it than just sharing a building,' he says. 'The managers - Arnold, Brendan and myself - talk on a weekly basis about cornmon issues, such as personnel development, pensions, even staff outings. But again, there's much more to it than that. The very fact that three of our DLL people work in the bank's dealing room means our relationship is already extremely close. But we also have a working agreement whereby if one of the operations identifies a cliënt they want in their portfolio, they would inform the others prior to visiting that particular prospect. That means we go in as a group with a whole range of options to offer.' PRODUCT DEVELOPMENT The option Frederix and his team would contrihute is cross border leasing. 'We're essentially a leasing team here, that's our expertise,' he explains. 'Although some of our leasing activities actually come close to factoring. When we started up here in 1992 - I'm proud to say DLL was the first Group subsidiary to see the advantages of the Republic - our main activity was booking transactions generated by our colleagues elsewhere in the Europe. Later, it was decided that we could expand our activities to develop transactions and products of our own which we could then sell to top Rabobank corporate clients, say in the Netherlands, but also in the UK and other markets.' GROUP ADVANTAGE As top corporates enjoy excellent credit ratings, and are not usually prepared to pay big margins, the DLL team had to come up with value added to generate the kind of margins they are looking for. The solution we developed was to insert into our structures the tax capacity and benefits we obtain from the third parties who act as investors in lease structures. Let me just give you one example. We've recently done a sale and lease-back transaction for Dutch Railways. We found an Irish investor who operates in the 38-percent environment [domestic tax rates]. They bought the carriages from Dutch Railways and passed part of their tax advantage on to us. That's one way you can deploy our presence here to advantage for the whole Group.' HIGH RETURNS A further clear advantage, specifically for DLL itself, is the funding operation run out of Rabobank's dealing room upstairs. 'All of DLL's funding requirements are sourced from Dublin,' Frederix says. 'That represents roughly NLG 3.7 billion per year and it is all managed here by our own team of three dealers in treasury. Much of our funding comes from Rabobank itself, simply because as a Triple-A rated source, it's cheaper. But we do fund from other sources as GROWING GRADUALLY If DLL writes the kind of business they forecast, will three positions in Rabobank's dealing room be sufficiënt? 'You know we're moving,' Frederix confirms. 'I think you'11 see our treasury staff remain stable this year. But we are looking for four new people on the leasing side, bringing our team up to 12. There's still a lot to do out there.' jan Frederix DE LAGE LANDEN Hoewel DLL zowel factoring als leasing kan aanbieden, ligt de nadruk op cross-border leasing en treasury-activteiten. General manager Jan Frederix onderschrijft het grote voordeel van het gezamenlijk benaderen van klanten. Het kantoor begon in 1992 met als belangrijkste taak het boeken van transacties voor de andere DLL vestigingen in Europa. In een" later stadium werden de activiteiten uitgebreid met het zelf opzetten van speciale transacties en produkten bestemd voor grote corporate klanten van de Rabobank. Vooral het fiscale voordeel voor buitenlandse ondernemingen biedt kansen. Voorbeeld hiervan is de sale en lease-back transactie voor de Nederlandse Spoorwegen.

Rabobank Bronnenarchief

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