strategy organization
Treasuryaction
didyou know?
Quality stuff
What's NewS Issue 9 October/November 1999 ~J
>- people within RICM who are there
specifically to support the F&A banks and
to a lesser extent Sipko's (Schat) people in
structuring. We see corporates as impor
tant customers because they are issuers of
honds and debt, they use derivatives and
are potential customers for risk manage
ment expertise. But we want to make this
a rruly two way street. I expect corporate
bankers to call and ask for services. I also
expect the origination team to call corpo
rate bankers with requests for meetings
with clients to discuss new issues, securiti-
zation, etc. This should be a true partner
ship which generates value for the bank.
The origination team should be seen as an
|casy way for the corporate bankers to
Ireverage trading, structuring and distribu-
tion expertise. The costs of the origination
team will be borne by capital markets and
revenues will only be generated if we do
deals with our corporate clients. That
way, they have incentive to work with the
F&A personnel.
that are not organized as they should be,
so 1*11 be sitting down with our people in
Singapore and Hong Kong. I have also re-
organized and clarified the reporting lines.
We had an incredibly byzantine structure
in which people often attached too much
importance
to reporting
lines. I've es-
tablished a
functional
structure
and defined
the risk busi-
nesses within
RICM - liq-
uid trading, illiquid trading, structuring,
risk management and rates. Then 1 de
fined the key areas of business focus:
FARM, new issues and private clients (re-
tail). Business teams, consisting of sales
and risk managers, have been put together
to run those businesses. I'm giving that
two or three months to work. Once we
have ironed out any implementation is
sues, I will start looking at the overall
management team. It will look at how to
allocate resources between businesses,
how to handle career development and
how to move RICM forward. Until the
end of the year, 1 see the main issue as
making the businesses accountable for
their decisions and their operations so
that we start on 1 January 2000 success-
fully as one team.
Business plans for all individual
units will be reported in our
December issue.
You make it sound easy. Are there no pitfalls
The only difficulty I can see at this stage is
when a banker has a cliënt and wants
some level of service, but the business be-
lieves the transaction is always going to be
a loss-leader. Clearly a loss making trans
action which keeps a potential relation-
ship going may be sensible and only the
relationship manager can have the per-
spective to take that view. To help in that
decision making, we will try to give peo
ple a rough idea of how much business
costs. Loan syndication, for example, is
now part of capital markets and it is a
product 1 want to make accessible and
useful for other parts of the institution.
We'll be putting loan and debt syndica-
tions together with securitization and
debt/loan trading. These are one business
in rny view. For the time being, until trust
and working relationships have been es-
tablished, we're more than willing to
work on a 'best effort' basis. We are say-
ing to colleagues: if you are prepared to
do this deal with us, we will share the
risks and rewards. Normally we would
work on an underwritten basis. The major
emphasis next year is making certain the
bridge between RICM, the F&A and the
international corporate business works
^roperly for all of us.
What about this year?
There are some specific activities, for ex
ample, in the AsiaPacific sale operations,
The new head of R1 Treasury Mar
kets is still a comparative new-
comer to the organization and as such
does not want to make snap judge-
ments or far-reaching decisions at this
early stage. However, John Geensen
makes a number of clear points on
where Trea
sury needs
to go. Look-
ing at the
current situ-
ation,
Geensen
says his ini-
tial impres-
sion is that
we're lacking the integral service orien-
tation which he believes is key to every
business. 'What we have is very much a
trading and structure-driven focus. We
need to change that to bring in the cus-
torner, so I will be building a sales force
aggressively to cover both the short
term interest rate trading and foreign-
exchange trading.' Another priority
will be ensuring that key people are in
place in every region. 'I want to be sure
they are empowered to act on my be-
half,' he says. 'We will be building an
organization which will be run along
regional lines, but we will have very
clear heads of product worked into
that structure. I want it to be a very
transparent, very flat organization.'
In addition, there are a number of is
sues Geensen will be pursuing in the
very near-future. 'We must get a better
grip on product development for the
member banks (there is a great demand
for these). 1 think at present we have an
outstanding product range, but it is fo-
cused at the top end. It stands against
anything the big plavers are doing - it is
really quality stuff. But it needs focus
ing. We have forgotten to some extent
the basic range of the treasury business.
We are very good at structuring, com
ing up with tailor-made solutions, very
good at packaging and repoing. Where
we are not that good, because we
haven't been particularly interested, is
the basics - basic foreign exchange, ba
sic money market trading. When we
get into our real customer focus, they
are going to need these basic products.
The way I see it is a kind of "old"
Rabobank offering plus futuristic
Rabobank in one package.'
