Bill Cuthbert on combining
activities
global financial markets
new publication
As everyone is aware, Rabobank is actively consolidating the considerable gains
made during our recent phase of global expansion. Nowhere is this more
evident than in the investment banking sphere, with its recent high-profile
management reshuffle. The continuing effort to fully embed our investment
banking activities into a total financial services package, and thus to serve key
customers in our niche markets, has now taken two decisive steps forward: the
reorganization of global financial markets (GFM) under Bill Cuthbert (now of the
Rabobank International (Rl) managing board) combined with the creation of
Rabobank International Equities.
Reassembling pieces
Practical solutions
Common ground
8 What'sNewS Issue 2 February 1999
The aim of the investment
banking realignment is
to attain greater clarity and
transparency among these
activities and partieularly to
underscore their role within
the overall strategy of RI
and the Rabobank Group as
a whole. The original vision
for investment banking,
articulated in late 1996, was
to leverage our three
primary strengths: namely,
our unmatched Triple-A
credit rating, our strong
Dutch distribution base, and
our expertise in the fields of
food and agribusiness (F&A)
as well as pharma and health care. This
meant building up a short term interest
rates (STIR) operation, expanding in
derivatives and soft commodities, and
preparing for the arrival of the euro.
A new food and agri research (FAR)
market study entitled 'The World of
Foodservice'is now available. The
report concentrates on fastfood, in
both the restaurant and catering
sectors. Topics include; market share
and what drives the market,
competition, supply and demand,
strategy and expansion.
For copies contact marketing Rl,
fax+31 30 216 1976.
Bill Cuthbert hands on in global financial markets
The pace of expansion was frantic. By
the end of last year, our London
operation had grown more than twofold
to reach 500 people, our income topped
the NLG 1 billion (EUR 453 million)
mark, and we approached critical mass.
Unfortunately our costs rose almost as
fast, and the structure of all these
activities had very little clear relation to
the group's overall strategy. 'After
charging ahead like this, we ended up
with a whole bundie of things that
nobody understood,' remarks Cuthbert.
'There was simply not enough
transparency in the operation. Our
current task is to take all of these pieces
and reassemble them in a sensible way.
Our essential strategy remains
unchanged. The real challenges are
cultural and' organizational. Specifically,
we've moved into a phase of integrating
these activities into a more coherent
structure that will help us better advance
the group's strategie aims.'
What this means in practical terms is that
all of the business streams previously
grouped under the headings of short term
interest rates (STIR), fixed income
derivatives (FID), foreign exchange (FX),
and global equity derivatives (GED) will
henceforth be brought under the aegis of
global financial markets, thus marking the
end of the perception of 'investment
bank' as a stand-alone entity.
FID is being rearranged into
several clearly-defined units
including commodities, credit
and structuring (CCS),
financial engineering, long term
interest rates (LTIR), and the
investment books. The process
of integrating the financial
institutions government group
(FIGG) into relationship
management and the wider
sales and marketing operation
is also proceeding apace.
- 'Basically, this is all about
refocusing on the substance of
our original strategy. We've
integrated the various derivatives
activities, turned financial engineering
into one single business, and tried to get
people in sales to start to talk with each
other. We're not going to break down
product barriers; interest rates are
something very different front equity
derivatives. But we can seek out common
areas and synergies. Before, we had an
ivory tower and six organizational
stovepipes. People across the desk from
each other in the dealing room didn't talk
unless somebody spilled a cup of coffee.
And there wasn't sufficiënt emphasis on
the Netherlands, which is the key
production platform for all our euro
activities. After all the excitement and
attention surrounding the expansion in
London, I think it's time the Netherlands
got their fair share of a boost. But what
we're really airning for here is product
primacy rather than regionalism.'
