organization
Reporting to the board directly:
Willem Beelaerts van Emmichoven
Jonathan Laredo(GFM)
Alain Younes
What's NewS
The idea, then, predated the concept that consul-
tants only started selling in the mid-1990s.
It was great stuff and I was and still am a
firrn believer in the sector focus. Risk miti-
gation and accepting the risk, concentrat-
ing knowledge on the risk and if the risk
happens, as it did during the Asia crisis,
you come out of problems in considerably
better shape than the non-focused banks.
At least, you do almost every time.
So you signed up?
1 carne into contact with Rik van Slinge-
landt in 1993. He was talking about four
business lines - credit, international trade
finance, treasury and private banking,
which was in its infancy in the bank.
I thought this approach had real potential,
but we'd need quite a product range to
support it. That is why I have always
been a supporter of the investment
banking strategy, provided it is done in a
measured way.
You said the lack of focus on administrative
processes was an omission in the original plan. How
did that work in practice
I can remember Rik predicting in October
1994 that we would have 100 branches in
25 countries by the year 2000. By 1998,
we already had 136 offices in 36 coun
tries. But if you'd said that in 1995, no
one would have believed it. Front 1994
onwards, we were opening offices that
were cashflow positive usually by the sec-
ond year of operation, but sometimes in
erational excellence) action. It was de-
signed to address this imbalance. Unfortu-
nately, the majority of people saw this ex-
clusively as IT. I think everyone would
agree we have consistently underestimated
operational requirements and have only
started addressing that shortcoming fairly
recently.
At the time, the slogan was something along the
lines of: grow as fast as you can earn.
That's correct. And we did grow, espe-
cially when we stuck to our F&A focus. If
you look at Europe, we have been most
successful in countries like Spain, which is
almost exclusively F&A focused. This
taught us something and the result was
the Customer Focus Strategy that was
launched in 1995-1996. At the same time,
people had come to the conclusion that
the old CBS has outlived its usefulness. In
that strueture, international offices have
been a sort of appendage to a domesti-
cally focused organization. The new
premise was that the international net-
work was an organization in its own right
and needed its own strategy.
You mean the Customer Focus Strategy.
Yes. Again, I think we made two omis-
sions here. The first is that we did not de-
fine the 'finan-
cial institutions'
cliënt group,
which - in hind-
sight - gave the
(Rabo Securities)
Rachel Bosman (secretary to the board)
(Claudia Smit joins Rachel from 1 January 2000)
the first year. This was unheard of.
It also meant that start-up expenses
took a huge chunk of budget.
So even more expenditure on increasingly
complex and costly back-office systems wasn't de-
sirable?
This was an omission that was recognized
in 1995 when we launched the OPEX (op-
investment banking
initiative rather more
room to mushroom
than was wise. The
other loose end is that we decided that
our focus should be food and agribusi-
ness, but we still included a whole grey
area called "international corporates'
without defining clearly which companies
were meant.
We've talked so far about what we didn't do. Are
there things you look back on and think: yes, that
was weit done
Absolutely. I can think of two easily mea-
surable examples of how we have done
what we set out to do in the mid-1990s.
Our goal was to create value. You know,
a growth strategy is not designed to build
yield perse. Rather, it is designed to build
value. As an example, we can measure the
value we have grown in both Australia
and in international private banking and
trust because there have been many arms-
length purchases and sales, certainly of
the latter, in recent years. If you look at
our IPB activities, a reasonable value
would be between NLG 500 and 600 mil-
lion. That is a conservative estimate. It
was taken out of RI at the beginning this
year and became a separate part of the
Group - for free. The value was built, we
shed blood, sweat and tears to achieve it
and the value is still available to the
Group.
The other is Australia?
In 1994, we bought PIBA for the princely
sum of NLG 120 million of which 10%
was good-will. Last year, we sold a part of
our portfolio all of which was good-will
for nearly NLG 100 million. The earning
capacity of our operations down under is
in the region of NLG 100 million per year.
So a simple arms-length valuation would
be around NLG 1.2 billion. Yes, 1 call that
building value.
The joint venture with DG Bank means significant
changes for RI. In your new role as Rabobank Ned-
erland's head of interna! audit, you will still be
working closely with us. How do you see that role?
Very much as I saw our customer focus in
RL There are many roles an accounting
service has to play and many clients who
have to be pleased - we work for the
whole Group. But 1 think there is one
cliënt who is often forgotten - the ultimate
cliënt, our stakeholders. These clients
have to believe in us, they have to be as-
sured that our capabilities are second to
none, that we administer and safeguard
their values. So we must safeguard our
own reputation for operating excellence.
That's what our clients want. We are in
the process of defining a strategy for inter-
nal auditing that we hope will deliver the
kind of value our many masters demand. I
hope you'11 let me come back and explain
what we're doing in the new year.
