Global prognosis
O
10
special
What's NewS Issue 11 December 1997
health care
is something along the
lines of aiming to be one
of the best in this
particular market. To
achieve that, he believes
a number of major
themes must be
addressed:
the creation of a single
global balance sheet
full exploitation of all
forms of liquidity
diversification of
income sources from
proprietary financing
function
introduction of a
customer focus to
STIR.
The above clearly
requires a lot of work,
planning and
organization. So what
happens next? STIR will
be exploring other
resources and
responsibilities, ie. the
establishment of centres
of competence so crucial
to both a single balance
sheet and effective
operation. The business
plan (at present, the
documents on the table
are no more than
proposals) will be
completed and STIR
will begin tackling what
it calls the '41,000
minds' challenge - in
other words, Cuthbert
and his team will be
active in communicating
how they fit into the
existing organization
and what they have to
offer. But perhaps most
significantly, what
Cuthbert is hoping to
do is 'confuse people as
to who they work for.
We want to try and
instill the notion that
people no longer work
for New York or
London or Hong Kong,
they work for
Rabobank International
- whatever their actual
location.'
Cuthbert will be
The task forces reported exactly one year ago,
health care was still pretty much a new kid on the
block. In the meantime, hard work and focused
marketing have given the bank's growing number
of dedicated teams a shot in the arm. Business
manager Arnold Kuijpers reports on how health
care is making the pace for the future.
The choice of health care as a
focal sector for Rl is no longer
questionned, not least because
of the unremitted lobbying
carried out by Kuijpers and his
cohorts.This is a large and
steadily growing market. It
offers a good fit with
Rabobank's international
market positioning, ie. by its
very nature health care is
relationship banking par
excellence as well as being a
knowledge intensive sector.
'Those are advantages,' notes
Kuijpers. 'Add to that the fact
that we already had something
of a business and know-how
nucleus and that no other bank
is doing it, then you'll see why
it's an opportunity for us.' A
number of demographic factors
are also making the sector
increasingly attractive - greater
life expectancy in many
developed markets which means
demand will be even more
discontinuous and growing
purchasing power for health care
and related services.
PRODUCT ACCESS
But however much progress has
been made, there is still a long
way to go before health care
becomes firmly embedded in the
bank. 'One problem is a lack of
product capabilities,' notes
Kuijpers. 'We have no difficulty
placing products - there's enough
Arnold Kuijpers
demand. It's more a problem with
access to products. We still focus
too much on the single product
approach (credit).This is where
our product specialists in
investment banking can really
help us out.' According to Kuijpers,
it is more than simply putting a
cluster of products in place. 'That's
important, of course,' he says. 'But
this industry needs different
products at different stages in its
development. What we should be
doing is positioning ourselves to
anticipate those requirements in
our various regional markets.'
Besides the opportunities
investment banking could offer,
the health care people are also
location regardless of the
impact on branch P&I.,
provided this action will
increase group profitability.
They will set up sales forces
around the network who will
report to them.
'Understandably,' Von Ungern-
Sternberg continued, 'the
question arises: what do the
general managers then do?
Initially, they will see their
direct management
responsibility for what was in
the past their biggest single
profit centre severely curtailed.'
BUILDING CONFIDENCE
In his introduction to RICO
earlier that day, Arthur Arnold
had already outlined general
managers' responsibilities to
local markets as representative
of a powerful, conservative,
reliable and solid bank. Von
Ungern-Sternberg reiterated
Bert Bruggink and his
controllers are working on an
'appreciation'system which will
take into account every office's
contribution to a done deal.
that key role. 'Customers will
need to feel comfortable that
Rabobank is a reliable, long
term player in IB. Newly
hired, fairly young IB
professionals, however good
they may be professionally,
will on their own not be able
to imbue this confidence in
our clients. Until such
confidence has been inspired,
we may do opportunistic
deals, but we will not be
counted amongst the top five
IB relationships for selected
larger corporales or
investment institutions.
Therefore, this relationship
management function is a key
role of the general manager.'
BRANCH CONTROL
Von Ungern-Sternberg went
on to make an inventory of a
number of other crucial areas
where in his perception
nothing has changed in the
traditional general manager's
role and responsibilities.
'They are our local
entrepreneurs, which from an
IB point of view will ensure
customers are not only well
treated, but also that the local
market is understood and
local opportunities for
Corporate finance is on track to
meet the goals set in its
business plan (see What's
News, 9/97).
