Rectification WHAT'S NewS Issue 8 August/September 1997 info exchange 7 Internationale priority should be to arrange the best possible deals for our F&A clients. This means assuming the roles of arranger, lead manager and, if necessary, underwriter, while at the same time sharply limiting stakes, exposures and retained risks. Provide access to non-banking markets instead of competing against them: financial disintermediation is here to stay and our F&A clients have a growing interest in securitization. We must provide active support in promoting non-banking sources of finance including private placements, debt or equity, and/or ^jpvestment funds. Move towards more creative structuring of financial solutions: this applies both to financing requirements, and to the management of surplus cliënt funds. We need to further evolve our expertise in alternative structures and their balance sheet, tax, pricing and risk implications, and also place greater stress on engineering multidisciplinary solutions involving structured finance, mergers and acquisitions (M&A), project finance and investment banking. An enhanced ability to identify and manage risks confronting our F&A clients: this will apply to traditional areas including interest rate and/or currency movements and country risks, as well as Éfc&A-specific concerns such as raw material supply and volatility in market prices for raw materials, inventories and final products. A considerably strengthened emphasis of F&A corporate advisory services: This principle is powerfully knowledge-driven and involves enhancing our focus on strategie corporate issues including mergers, acquisitions, joint ventures, divestments and related financial restructuring. A reallocation of scarce resources to those F&A activities with the best overall prospects: this has several implications - it involves not only placing emphasis on selected financial products and services but also to particular regions and countries and F&A market subsectors that have the brightest future prospects. The operative question remains: 'Where is Rabobank International able to provide its F&A customers with demonstrable and superior value.' Indeed, this essential question underpins specific decisions on the allocation of our scarce capital as well. FACTS AND FIGURES The new F&A business plan reflects several fundamental choices in this respect. Among the most important of these is an actual freezing in the solvency allocated to corporate banking, with a consequent reduction of low-ROS corporate lending by several of the existing offices. Subject to reconciliation of the various business plans by the RI controller, the increase in the solvency requirement during the period 1997-2000 should amount to some NLG 578 million. Of this, about NLG 478 can be financed through growth of its own funds. The share of total income generated by corporate banking will likely fall back from its 1996 level of 70 per cent to about 50 per cent in three years. Meanwhile, we expect to see an increase in the share of corporate finance investment banking from about 11 per cent to 25 per cent, and an unchanged level of income from trade finance, at 19 per cent. The capital allocation for F&A corporate lending will show moderate overall growth - up roughly NLG 200 million. However, total capital available for F&A corporate lending in low-return regions (like Western Europe and North America) should decline by approximately NLG 150 million. This will release funds for use in emerging economies offering higher interest margins. There, new offices will be established. SUPPORT CENTRES Meanwhile, according to the F&A Plan, capital employed in the trade finance area will nearly doublé to NLG 500 million; in F&A corporate finance it will quadruple to NLG 380 million; in investment banking it will rise sixteen-fold to NLG 160 million. It is also recognized that not all of RI's offices can (nor should) be equipped for self-contained operation in F&A; hence, the identification of 'support centres' for these activities. For example, the F&A Plan foresees a substantial upgrading in research. This function will be partly regionalized. Key offices will include Utrecht, Warsaw, New York, Sao Paulo, Singapore, Sydney and Hong Kong. Support centres have also been identified for corporate finance: London, New York and Singapore will form the overall core. Other support centres will join this core to provide expertise in specific fields: Utrecht for structured finance, Warsaw and Sao Paulo in the case of M&A, and Sydney for securitizations. On the Investment banking side, private placements will be handled out of Utrecht, New York and London. Gilde and Robeco will be responsible for the investment funds. In securities, Amsterdam, London, New York, Singapore and Hong Kong will be developed as support centres. In risk management, the key offices will be Utrecht, London, New York, Sao Paulo, Warsaw, Hong Kong and Singapore, while financial advisory services will be concentrated in Utrecht, London, New York, Sao Paulo, Singapore, Hong Kong, Sydney and Warsaw. 'The F&A support centres will be erected upon the basis of close cooperation with the management team investment banking and the policy committee corporate finance,' says Greenberg. 'In this we will not act unilaterally.' FIELDING THE TEAM As the F&A Business Plan 1997-2000 recognizes, one of the most important of our many unique selling points is the fact that we can field a global team in F&A, and synergize our international perspective in new and innovative ways to deliver superlative value and to more closely meet our clients' specific needs. On page 1 of our July issue the IAMA introduction said that the world population was set to doublé by the year 2020. Most of you will probably have questioned the extremely near- future prediction and have realized that something was wrong. It is world food consumption which will have doubled by 2020 and tripled by 2050; the world population will have doubled by the year 2200. Our apologies for this error.

Rabobank Bronnenarchief

blad 'What's news' (EN) | 1997 | | pagina 7