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5
'Where there's risk, there's
OPPORTUNITY.
14 1
special
1
I
Qj
Hong Kong
WHAT'S Nf.wS Issue 4 April 1998
APFT's Indonesian-
based Twan Geurts
MAJOR RE-EVA LU ATI ON
It's a bit like the chicken and
the egg, if you'11 forgive the
pun. Now, the industry - not
only in Indonesia, but region-
wide - needs major re-
evaluation: the question is
where to start. 'That is why
this task force has been put
together,' says Koh Ban Aik in
Singapore. 'It will cover the
region and as such includes
Gordon Butland from Sao
Paolo, Alvin Chang and Edgar
Kerkwijk from Singapore -
they are M&A and FAR
respectively, and Twan Geurts
down in Jakarta.' The
initiative has been welcomed
by the sector as a means of
finding real solutions. 'We've
been talking to customers in
Thailand and one CEO of a
family business actually told
me they are open to outside
investors now - that would
have been unheard of one year
ago. But they realize they need
the capital, the technology and
the ideas western investment
can bring. Eor us at the bank
this means opportunities to
assist in M&A. So creating a
dedicated team helps
everyone.' Rabobank Duta is
also up for a beauty contest for
another of the country's top
feed and poultry companies. It
is hoping for a mandate to
handle that client's
restructuring, a mandate which
would confirm our reputation
for know-how in the sector.
Many good corporates in Hong Kong are feeling the
squeeze as troubled banks pull out, close down, or simply
pressure clients for early repayment. Johnson Fu and his
team at Hong Kong branch are doing what they can to
ensure we utilize every opportunity to build better
relationships with these customers.
'Quite a lot of banks here have this there are two options -
come under pressure following selling assets or demanding
the crisis,' he says. 'Many are repayment. Unfortunately for
facing a liquidity squeeze and many good corporates, these
others are actually closing banks want cash. I'd say that
down. Normally, in cases like applies not only for, say, some
Thailand
of the Asian players - 10
branches of foreign banks have
closed their doors in the first
quarter of 1998 alone. But
we're also seeing branches of
European banks coming under
pressure from their head
offices to reduce their balance
sheet. And they are not always
discrete in the way they
attempt to do that.'
THE RIGHT BALANCE
He does not need to add that
Rabobank is not among these
European banks chasing a 20
percent pay back. Rather, we
are among the institutions who
are picking up the pieces for
good corporates. 'Compared
to other countries, such as
Indonesia, we're pretty
comfortable here in Hong
Kong,' Johnson believes. 'And
by extension many customers
are in good shape. The fact
that banks are leaning on them
China
Philippines
is causing real problems. What
we try to do is provide the
kind of support they need on
the liquidity side and to use
that support to strengthen our
relationship with them. But
you have to be very careful.
We need to strike the right
balance. Where there is risk,
there is opportunity and when
corporates are feeling the
squeeze they don't mind
paying a little more. But we
also have to make sure that
they are sound. We've had very
strict instructions from Utrecht
on lending. We spend a lot
more time than usual going
through the portfolio to make
sure our customers continue
sound and good. While there's
opportunity out there - and
we're going for it - we can't
afford to miss the slightest hint
that a corporate is getting into
trouble.'
Johnson Fu etisuring
we utilize customer
relationship
opportunities
