Wrightson's,
THE RIGHT CHOICE
NZ special
WHAT'S Nl.wS Issue 3 March 1998
9
Dean Clark heading NZ's
corporate banking team
jrimary and corporate
janking are inextricably
linked. Admittedly the country
is small, but potential for
corporate banking is big. Ten
local companies account for 80
percent of all the country's
exports - and half of those are
agri-based. Rabobank's global
network is proving a good
marriage for export-minded
New Zealand corporates.
RURAL BACKGROUND
As has conre to be expected
from Rabobank New Zealand,
the two corporate bankers are
again from strong rural
backgrounds. 'It's important in
this market to have an affinity
'ith the primary sector, which
we both have,' says national
manager and head of
corporate banking Dean Clark.
Philip McKinstry, New
Zealand's first banker to cross
the fence from purely primary
sector responsibilities to
corporate banking, sees his
background as essential. 'Being
a small market, we are dealing
with many rural primary
clients who are also directors
of major agribusiness
companies. It's important to be
in a position to talk to them
with an understanding of their
product base, use the jargon
and be able to grasp the
echnicalities involved. The
act that we bank the entire
supply chain is unique. It's a
great example of knowledge
being vertically integrated
from grass roots up.'
EXPORT ORIENTATED
As already noted, the market is
characterized by what the
whole team describes as fierce
competition. And, in the face
of it, Clark admits an added
string to Rabobank's bow is
our global contacts. 'As far as
competition goes, other
corporate bankers in this
market are often domestically
focused without a true
understanding of the product
once it leaves New Zealand
shores. At the corporate level
we really feel being
internationally minded counts.
New Zealand is a substantially
bigger exporter than it is an
importer and over the past
decade successive governments
have been committed to
economie reform. The result is
a total abolishment of all
agricultural subsidies, which at
the time caused some turmoil,
but the policies have left
behind a strong economy with
high levels of growth and low
inflation.'
HEALTH CARE
A new notch in the corporate
team's belt, and unlike rural
lending an area of national
growth, is health care. The
team admits that although they
do not have assets at the
moment, they are certainly
working on it. The health care
industry's total local funding
stands at NZD 1.5 billion, 80
percent of which is covered by
New Zealand's top seven
banks, leaving the remaining
20 percent for the other 11
players, including Rabobank.
'The New Zealand health care
industry is in the process of
being privatized,' continues
McKinstry, 'but is very much
in a transitional phase;
presently it's highly political
and in a constant state of flux.
But because it is an area of
huge potential we are
positioning ourselves now in
readiness for business in the
near future.'
AUSTRALIA LINK
For the corporate team, New
Zealand is a limited market,
which is why the close link with
Australia is a vital one. 'We rely
on the Rabobank Australia
Group for the back office
support we are missing,'
confirms Clark. 'We tap into
their market and they help us
out with support in terms of
treasury, credit analysis,
administration and
management.' While on the
subject of networking, Clark
shoehorned a point he
considered essential for future
success, that of network
communication. 'It is important
to have commitment from the
rest of the network to be able to
coordinate our clients' global
requirements. New Zealand
represents one of the smallest
branches in our network and
we are only too aware of the
disadvantage of our 12 hour
time difference, but we are
worth taking notice of because
we do have some big players
here, even in global terms.
Commitment from our network
is vital for us. It's not only our
future, it's our life blood.'
Philip McKinstry,
crossed the fence to
corporate banking
No mention of operations down under would be complete
without a look at our recent, and much publicized,
Wrightson's Farmers Finance acquisition. Following
extensive press coverage, word is out - the Rabo-Wrightson
strategie alliance is more than viable, it is clearly a
partnership for success.
As already established, a
characteristic of the New
Zealand market is that growth
is slow. And in such a climate,
the only means of real growth
is to buy - at least that is the
idea behind the acquisition of
the rural finance arm of New
Zealand's farm services group,
Wrightson Ltd., a deal
representing the last sizable
rural lending portfolio
available in the country. The
move sees the take over of
Wrightson's loan book of
NZD 600 million and around
50 staff. It allows business to
continue operating from 28
Wrightson's outlets in New
Zealand - adding to
Rabobank's existing five
offices, all of which will be
rebadged Rabo Wrightson
Finance. According to
Australia and New Zealand
Group CEO Cor Broekhuyse
and Group managing director
Bev Walters, 'the move is a
hugely significant opportunity
for the Australasian Group to
expand activities in New
Zealand. It effectively triples
our portfolio - while
Wrightson's has a total book
of NZD 600 million, ours
stands at NZD 300 million.
