WHAT'S NewS Issue 9 October 1997
customer value
5
jorae people thought we didn't really
^Pnean it. But we are deadly serious. We
have to be. It is the only way to enable us
to create customer value based on
knowledge. The thinking behind the
customer focus strategy, and there has
been a very thorough thought process, led
us to make the choices we have made.'
Another crucial element in this process is
personal commitment. Asked if he thinks
people would have believed sooner if the
strategy had been imposed upon them, he
rejects that idea as 'not our culture. I don't
believe in imposing things on people. 1
believe everybody should go through a
personal process of recognizing the issues,
accepting the consequences and
subsequently committing themselves to the
future. Everybody should make a very
conscious choice to join us, embracing our
•oals for the future, or get out. Our
ustomers need total commitment from
our people.'
RAPID ACCELERATION
The future has been very much on the
minds of international Rabobankers as
business plans were finalized and a new
approach to budget setting has been
introduced to tackle our target markets.
One area where RI has been concentrating
attention is the Euro. 'When we first
began to set out development frameworks
for the strategy almost two years ago,'
Arnold recalls, 'we were aware that
trends, such as globalization, deregulation,
desintermediation, securitization, the rise
of equities etcetera, were ongoing and we
needed a viable, long-term response.
Today, we see those trends have actually
^fcccelerated even more rapidly than we
^^orecast only two years ago. So, you will
understand why it is so important to have
made our choices, and to build a strong
knowledge basis for serving our
customers, creating customer value,
actually making the difference. By the
way, securitization is going to enable us to
continue to serve our customers in the
future.'
BIG INVESTMENT
If the past 18 months have been a period
of choices, changes and concentration,
then look out for there is more to come.
At least, there will be some pretty big
decisions on the agenda at the
forthcoming RI conference in November.
'All general managers, members of policy
committees and management teams who
^^re not GMs and all heads of head office
functions - around 85 people in all - will
be gathering here. The business plans for
each particular area of focus as approved
by the managing board have already been
sent out to these people and we hope the
meeting will be an opportunity to provide
a platform for exchanging more
information on them. But we will also be
putting forward all the financial
implications ensuing from them - and they
will look rather different for 1998. We
foresee very big investments, by that I
mean additional investments to those
already earmarked for the customer focus
strategy, in particular in the areas of
corporate finance and investment banking
capabilities in order to comply with the
demands of our target customers. Last but
not least we will discuss our new human
resources framework.'
FROM CREDIT TO KNOWLEDGE
DRIVEN
One area where significant investment is
already being made is in improved
training and know-how transfer to
personnel. The new F&A training
program (see page 14) is just one example
of how we are investing in our people.
'Our people represent our knowledge. If
you teil customers you are knowledge
driven, then you have to put a lot of effort
in to building that knowledge. We are
doing that.' There is a very clear reason
why we believe in this knowledge driven
strategy. If we are to generate the kind of
customer value that will equal bottom-line
value, then we need a shift from credit-
driven to knowledge-driven. Obviously,
this is a change in mentality and people
have to undergo that process themselves.
But the bank can and will help through
training because this shift will be crucial
for our long-term survival.
CHANGE TAKES TIME
'Let me put it this way,' says Arnold.
'What we are doing now is going through
a change process, from being an investor
for our customers to becoming more a
financial services intermediary. What has
to be clear to our customers is that we will
organize ourselves in such a way that the
customer can achieve his ambitions for
future growth and that we will use
whatever capabilities that are needed to
do so, including other banks, other
investors, outside resources. That is the
essence of the change process we have to
go through. No one believes you can
change overnight. To me "enabling" is the
key word. So that is what we will be
investing in, making sure that we can
continue to serve our customers in the
future. And as the first half of 1997 shows
us, it works. I have a lot of respect for the
way everybody is handling the change
process. It is very encouraging, very
motivating for all of us, and a reason for
great comfort to see the way in which our
people of Rabobank International are
facing the challenge of being a Global
Niche Player.'
INTERIM NUMBERS
This is how the customer focus strategy and enhanced networking looks in figures (xNLG
million).
Balance sheet figures
Lending on balance
Lending off balance
Balance sheet total
Derivatives (notionals)
Funds entrusted
Equity (tier 1)
ROS
ROE (tier 1)
First half 1997
54,475
31,877
180,620
1,037,450
6,277
4,775
8.5
10.6
First half 1996
46,077
56,218
158,470
796,165
7,446
4,500
8.6
8.6
Growth
18.2
-43.3
13.9
30.3
-15.7
6.1
-1.1
23.2
P/L figures
Interest
Fee and other revenue
Total income
Total expenses
Pre-tax results
517
443
960
574
286
498
233
731
418
188
3.8
90.1
31.3
37.3
52.1
Net profit
Capital growth
Number of staff
215
248
3,252
153
205
2,712
40.5
20.9
19.9
The managing board has decided to create an additional provision of NLG 80 million (as of
30/6/97) for future investments in our financial administration and IT systems.
