country pro file
PIBA five years later
Substantial profits
Excellent progress
WhatsNewS issueö'june 1999 y
to organize a meeting with Australia's
agribusiness leaders, an event which has
since been formalized into a regular
public/private sector agribusiness advisory
forum. 'From the government's stand-
point, we were considered the ideal
partner in the agribusiness field,'
Broekhuyse says.
These accomplishments are reflected
clearly on the bottom line. Assets, which
in 1995 were AUD 2 billion, have since
grown more than threefold to AUD 7
billion. The workforce expanded from 150
people to 500 in 1998 and revenues over
the same period increased from AUD 56
million to AUD 140 million, while the net
-pre-tax resnlts advanced from AUD 25
Hhillion to AUD 75 million, which
represents a yearly increase of over 30
percent even after excluding the
exceptional income of AUD 85 million
derived from the sale last year of PIBA's
residential mortgage origination unit to
the ANZ Banking Group. RAG has also
successfully tapped the booming
Australian market for funding, using a
new medium term note program described
on page 8. Meanwhile, the New Zealand
market has been developed as well, not
least through the early-1998 acquisition of
Wrightson Finance, which has given RI a
substantially broader market share in New
Zealand rural lending and 'well-positioned
us to achieve the same kind of growth
rates as we've experienced here in
Australia in recent years'.
Overall, Rabobank Australia is
successfully making the transition from
an institution primarily concerned with
selling credit to one selling know-how
based products and solutions to a wider
cliënt base. lts new agribusiness Consul
ting and research unit, to be profiled in a
forthcoming issue of What's NewS, has
not only continued producing high-
quality research material but is also
winning a number of important advisory
mandates for such important corporate
clients as Monsanto in the agri-chemicals
field (RAG's agribusiness advisory board,
another initiative, was featured in the
April issue of WNS). If Broekhuyse has
one concern, it is the relative underdeve-
lopment of the group's information
fcchnology (1T) infrastructure. 'We've
^ïade a huge effort to improve this
situation, not least at P1BA which was
underinvested in new systems when we
acquired it. Upgrading systems at a time
of such rapid growth has sometimes feit
like trying to change the tire on a fast-
moving car. However we've made
substantial progress over the last two
years, with the help of our dedicated IT
division.' All in all, five years has seen a
lot of growth and activity 111 our
Australian branch. From modest
beginnings, Rabobank International (RI)
can now rightfully claim 'a substantial
base for further growth in the near
future,' Broekhuyse says.
J
In late 1994, RI inaugurated an
important new phase in its commit-
ment to the markets of Australia and
New Zealand with its acquisition of
PIBA, a strong niche player in the rural
F&A market with coverage throughout
the Antipodes. Five years later, it can
point with pride to high levels of
customer satisfaction and a vigorous rate
of growth in assets and revenues.
Bev Walters, PIBA's managing director,
attributes this strong performance to
synergies with the Rabobank F&A
network, as well as PIBA's own strong
rural-oriented
business culture of
'wanting to do right
for our customers.
'The fact that most
PIBA account
managers come
from farming
backgrounds
themselves is
considered a real
plus out in the field:
the bank and its
customers speak the
same language.
According to a
recently-commissioned customer survey,
'both Rabobank and PIBA have
established a strong identity across both
farmer and agri-corporates, typically
being seen as lean, no nonsense, friendly,
knowledgeable, highly skilied and
competentdelivering value added
financial solutions.'
Following the Rabo-PIBA link, a farm
equipment leasing operation has been
inaugurated. PIBA's New Zealand
operations were rebranded under the
Rabobank New Zealand name (RNZ)
and further fleshed out with the
acquisition of Wrightson Finance. PIBA,
including its New Zealand arm, now
boasts a broad network of 54 offices.
And overall rural lending since Rabo's
acquisition has increased from AUD 1.1
billion to AUD 3.3 billion. PIBA-related
activities still make up just over 50
percent of the group's revenue, which
reflects the broader product spread of
RAG overall.
Says Walters: 'Since RI brought its size,
credibility, and lower funding costs to
PIBA, the company has really powered
ahead. We can all be very proud of these
achievements and that Rabobank's faith
in buying PIBA has been fully rewarded.
But,' he continues, 'the success that we
have delivered to RI creates obligations
as well. In our predominantly wholesale
banking environment, PIBA, with its
essentially retail operations,
is somewhat exceptional. It
is important that it be
nurtured and managed
accordingly. After all, the
return on investment we
provide compares very
favourably with any other
area of the Rabobank
Nederland group.'
Bev Walters establishes F&A identity
High on the list of new
initiatives is the continuing
development of a wider
range of common PIBA/
RNZ products - for example
leading-edge delivery of knowledge,
commodity risk management products,
and investment products - to further
strengthen ties with the rural customer
base. Another key will be the mobiliza-
tion of enhanced IT systems to enable
seamless transactions with the bank, not
least via the Internet and PCs.
In an important milestone at the end of
this year, Walters will step into reti re-
ment after more than a decade in
charge. Bruce Dick, who comes to us
from the New Zealand branch of
Lloyds Bank and was recently appointed
general manager, rural banking, for the
Rabobank Australia Group, is slated to
take over Walter's responsibilities with
regard to the retail operations, marking
the start of yet another phase of fresh
and positive development.
