WHAT'S NewS Issue 9 October 1997 info exchange 13 time-consuming and costly process that cannot be extended to international corporates except in exceptional cases.' STRIKING THE BALANCE If we strike the balance correctly, international corporate clients will continue to play an important role in the overall mix of our business. For one thing, they help us both to diversify our risks and to maintain an acceptable risk profile ranging between one and six as measured in the US solvency risk scoring system. For another, doing business with them helps provide the critical mass for the specialized services and products that we need to mobilize in pursuit of our broader strategie objectives in the core relationship ^k-oups. For example, against the ^^ackground of the worldwide trend towards securitization, our dual efforts to build profitable relations with a core group such as institutional investors - while simultaneously freeing up solvency to finance our own growth - can be advanced by lead managing and arranging deals for international corporates. The resulting paper can be sold to institutional clients, and thus earn fees and drive a higher turnover volume on our inventory. Of course, to maintain our rating and in order to accurately measure our performance in relation to the general target criteria mentioned above, we will need to engineer a substantial improvement in our management information and risk management systems (see article on page 6). Data generated ^^ïroughout the network must be consistent and enable us to measure risk in a way that is crystal clear both to regulators as well as the all-important rating agencies. In the case of both core and non-core business clients, however, there is a clear need to substantially enhance our proficiency in cross-selling, and it will be up to investment banking and corporate finance to deliver the goods. CORPORATE FINANCE The business plan for corporate finance places a sharp emphasis on the need to organize our know-how and spread it efficiently throughout the network. Many of our activities here are still largely balance-sheet driven - such as project finance - and while this business remains important it is equally clear, as Wouter Kolff remarks, that 'we cannot be all things to all customers.' The policy paper sets out several essential objectives. The aim is to build an innovative, cross-border, product-led wholesale capability in t selected areas where we can reach critical mass and clearly-defined levels of profitability. Strategie products include acquisition finance, mergers and acquisitions (M&A) plus strategie advisory, structured finance, syndication and trade finance. The aim is to achieve an overall net ROSadd of at least 12 percent, including after-tax benefits. FIELDING COMPETENCE In order to succeed, we will have to increase the proportion of value-added deals, particularly in connection with target F&A customers who are positioned higher up on the food chain. Such customers include brand portfolio managers, retailers, those involved in packaging and transportation, as well as food processors. Flitherto, the historical distribution of our F&A cliënt base has been more heavily weighted in the agri /commodity trading segment positioned lower down the chain. It is important to promote more intensive cross-selling of products and services, as well as to engineer appropriate bridges to link the know-how in our competence centres with the resources in our sales offices. The plan recognizes that the shape of these bridges will vary considerably from one area of competence to the next. KEY STRENGTHS Drawing on detailed input from our various corporate finance product groups, and the expectations of our three principal competence centres based in London, New York and Utrecht, the policy paper notes that most of our corporate finance activities are new and that our key area of strength at present lies in structured finance. This holds true for the Netherlands, London, New York and South America. The plan sees medium term opportunities in Central and Eastern Europe and notes that in Asia our activities are now mainly restricted to syndication operations. In structured finance, it is important to link our capabilities more closely with the emerging relationship management structure. Moreover, an increasing emphasis will be placed on M&A, against the background of restructuring in the food business, and on grasping opportunities associated with the ongoing securitization process. In connection with both of these areas, the report stresses the need to extend our research capabilities, not only on a sector-by-sector basis but at the individual company level as well, and on the crucial importance of hiring and retaining skilled staff. For more about investment banking policies see the coming November issue. Adrie Zwanenberg and his new Dairy Cooperative study. RECTIFICATION To clear up some confusion which may have occurred in the last issue - there are now two dairy studies available.The first, written by Adrie Zwanenberg is entitled 'European Dairy Cooperatives Developing New Strategies'and can be ordered from Rl marketing for NLG150 (tel.+31 30 216 2804). The second is one of the first in series of new style special reports from F&A. 'Changes and Challenges in the Dairy Industry in Central and Eastern European Countries' is also available from F&A Research (tel.+31 30 216 1178).

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