CORPORATE BANKING
CHALLENGE
ROS DICTATES
CREDIT THRESHOLD
4
info exchange
What's NewS Issue 9 September 1996
In today's competitive environment, the corporate banker can be compared to a
sprinter who is retraining to become a flexible triathlete with long distance
goals. Rabobank's new overall strategy, combining selected cliënt relationships
with business sector specialization, has likewise led to a two-fold restructuring
of corporate banking Utrecht's account management teams.
group. More
fundamentally, it will
require a psychological
change in the
organization itself -
away from a bank that is
specifically product-
driven to one that is
more broadly cliënt- and
knowledge-driven.
INCENTIVE PLAN
Rabobank Utrecht
ranked well above the
domestic competition in
the last (1995) customer
satisfaction survey, with especially high
marks for cliënt focus, follow up, and
general banking know-how. But in future
growth sectors requiring company (and
sectoral) know-how as well as the
capability to provide value-added services
like fiscal engineering, the survey made it
clear that there was room for
improvement. To create an incentive for
relationship managers to quickly develop
these skills, and thus to become more
effective salespeople, a business plan will
have to be formulated for each of the
target clients. This plan will specify the
clients' needs both in terms of forecast
CORPORATE
BANKING - NIEUWE
UITDAGINGEN
Onze nieuwe strategie
resulteert in een aantal wijzigingen voor de
accountmanagementteams in Utrecht.
Grote internationale klanten krijgen een
'relationship manager'die wereldwijd zorg
draagt dat de klant de producten,
informatie en diensten krijgt die hij nodig
heeft.
Als gevolg van de herstructurering worden
de middelgrote klanten overgedragen aan
de aangesloten banken. Een speciaal team
begeleidt dit proces zorgvuldig, zodat de
klanten dezelfde service houden die zij tot
nog toe gewend zijn.
Rob Niesert
Corporate banking Utrecht will
henceforth focus on a target group of
some 500 large multinational clients based
both in the Netherlands and abroad. Each
cliënt will be assigned a 'relationship
manager' - a single point of contact who
can match the clients' needs with the full
range of products, services, and expertise
that Rabobank can offer worldwide. The
operative phrase is: 'mutually beneficial
relationships.'
INTEGRATED SOLUTIONS
Rabobank relationship managers will have
to 'reinvent' themselves as specialists in
the clients' business in order to design
integrated solutions that are best tailored
to meet the clients' specific needs. Some of
these corporate bankers will be based in
Utrecht as well as in other branches
abroad, in the case of foreign-based
clients. Wherever they are, it will be their
task to oversee the activities of account
managers and product specialists
throughout the international network.
NEW MINDSET
'This will present a formidable
organizational and staffing challenge,'
says Rob Niesert, who is participating in
the organizational shift as managed by
Robin Bargmann. Part of the challenge lies
in assembling the best teams from among
the people available internally and where
necessary head-hunted from outside the
business volume as well as return on
capital invested.
LOCAL FOCUS
In a second and equally important phase
of the restructuring, all middle-market or
medium sized clients that are currently
being served by Corporate Banking in
Utrecht will be gradually moved under the
umbrella of the local branches in the
Netherlands. A process is now underway
to identify which clients will be involved
and which local branches will handle their
accounts. At the same time, the local
branches will have to cultivate the
expertise to effectively deal with these
customers, and thus this second phase of
the shift will be somewhat more gradual
than the first. It is crucial that standards
of service are maintained at the highest
levels throughout. To facilitate an orderly
transfer, some five of the existing 50 g
corporate banking account managers in
Utrecht have been assigned to some 250
middle-market clients in anticipation of
their shift over to the local branches.
The more stringent Capital Adequacy
Directive (CAD), combined with tough
new solvency requirements from the Bank
for International Settlements (BIS), are
clearly driving a transformation in the
bank's entire operation. This is especially 4
pronounced in the business of lending.
When lending money in the future, the
bank will have to focus its limited
resources much more closely and
strategically on target cliënt groups
operating in the priority business sectors
that lie at the heart of its new strategie
plan. Moreover, in view of a trend
towards rising risks and narrowing profit
margins, a new lending threshold calls for
a minimum return on solvency (ROS) of
10 percent for all clients.
This calculation of the return on solvency
is now included at the earliest stages in the
credit approvals process, and a low ROS
figure can be sufficiënt to kill an
application. For account managers who
have cultivated (now) non-focus clients,
this new policy may prove a difficult pill
to swallow. However, it is a crucial step ii^
the bank's new strategy and will help
further increase the proportion of fee-
related and value-added banking products
and services in the overall mix.
