POLICY COMMITTEE CORPORATE FlNANCE 12 info exchange WHAT'S News Issue 9 .October 1997 As the Policy plans for international corporate clients as well as corporate finance both underlined the need to train a laser-sharp focus on target customers, specific markets and certain product categories and the one couldn't be seen without the other, the decision has been taken to merge the respective policy committees. In some cases the plans call for radical changes in the way we work. What's NewS discussed the impiications with our managing board vice chairman Wouter Kolff. 'Some time ago, we enunciated our broad strategie objective; namely, to cultivate highly selective relationships that are built on delivering value-added products and services,' says Kolff. 'Now, with these new policy papers, we have taken the next step of defining the essential details involved in actually executing this policy.' INTERNATIONAL CORPORATES What sort of companies fall under this rubric? Essentially, international corporates have been defined as business customers who share two basic characteristics. First, they are operating outside our focus sectors of F&A, health care, and financial institutions. For instance, they might be specialized in a particular niche of the Telecoms market. Secondly, they are not within the sphere of the large internationally-active Dutch companies. For a variety of reasons, we serve these companies with a particularly full spectrum of banking services that we cannot profitably offer every corporate customer abroad. SWELLING NUMBERS Our international corporate customers have swelled in number as the geographic scope of our activities had widened around the world. Regrettably, the ROSadd, which is to say the profitability and return on solvency associated with these clients, has failed to keep pace. Clearly, since our solvency constraints imply a need to prioritize, these customers will in the future have to be dealt with differently than core clients within our focus fields. 'It is time to become more selective,' says Kolff. 'Doing business with international corporates must advance our overall objective of insuring a decent ROSadd return overall - something like six per cent on a portfolio basis by the year 2000 - and it must be consistent with our intent to finance growth by diminishing the proportion of credit- related business while increasing value- added products and services particularly in investment banking and corporate finance.' In practical terms, this implies that we will have to adopt a more immediately product- and yield-driven orientation when it comes to international corporate clients. IDENTIFYING NICHES While a cliënt management group is being formed - one that will be supported by policy committees actively overseeing the key cliënt focus sectors - the international corporates committee will play a less interventionist role. It has carefully avoided identifying acceptable operating niches for our corporate clients. Instead, it has simply set basic criteria for profitability, and wil) otherwise rely on the initiative of individual offices throughout our network to make detailed selections that reflect local or regional opportunities. 'The burden of entrepreneurship rests with the offices,' says Kolff. 'They have to choose a judicious mix of industries along the "industry life cycle" curve and maintain balanced portfolios. In addition to our ROSadd targets, we want to see a 20 percent gross return on the invested solvency per customer and per portfolio. What's more - since we spend a lot of time on cultivating our customer relations - we want to see a minimal income per customer of some USD 500,000. So our ambition level has been substantially increased.' HANDLING CUSTOMERS Kolff illustrates the difference between the Wouter Kolff finalizing policy plans. handling of a focus cliënt on the one hand and that of an international corporate customer on the other. With larger and primarily core-market clients, the senior relationship manager (SRM) model will apply. These SRMs will act as a single point of coordination, reference and authority. VALUE ADDING In the case of international corporate customers, in contrast, Kolff notes that 'we need to be proactive, just as we are with core customers, but on a different scale and with somewhat different goals.' The emphasis will be on selling selective products and delivering quick bottom-line results for the cliënt and ourselves. Say we're in London and dealing with a big M but non-core UK company. As with our core customers, we want to bring more value-added products to their attention. But it won't necessarily be the relationship manager who takes the initiative: it might just as well be someone from structured finance or investment banking. ENJOYING BENEFITS A fundamental difference in approach is that the large network cliënt will enjoy the full benefits of a relationship manager, who will be directly responsible for orchestrating our product know-how and capabilities in a way that meets the customer's very specific and long-term needs. In other words, the sale of products and services will be linked to delivering customer value and cultivating a long term relationship. He will act less as a 4 salesperson and much more as a close consultant. His credibility will therefore be based on the thoroughness of his industry knowledge and on his ability to establish firm bonds of trust. This is a

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blad 'What's news' (EN) | 1997 | | pagina 12