F&A as segment of world economy
i■BH 4
Country Share of GDP
Total GDP, USD bn
1 5
5 I
6 1
Agri
Food
F&A migration
Banking products in F&A
Upgrade and re-gear
What's NewS Issue 4 June/ July 2000 I5
Emerging
markets
INDIA
CHINA
INDONESIA
BRAZIL
ARGENTINA
HUNGARY
MEXICO
8
6
Mature
markets
JAPAN
382
902
215
820
380
403
46
7800
4200
8100
USD 102
profit, 4-5%
growth
USD 225
profit, 2-4%
growth
The overall F&A contribution to world GDP is estimated at USD 1.5 trillion, growing
at 3-4% peryear
team - Niek Streefkerk, Iwona Lechocka
and Bruce Tozer, supported by Matthias
Wiemeyer, Mark Lobo and Derek D'-
Souza of Rubus - worked through the fi-
nal night to define clear goals. A simple
listing here belies the massive task that
faces the workshop participants who
have 'volunteered' to carry this project
forward vigorously. Among the areas
of action are:
formulate and refine product/market
ambition;
HR;
MIS/Control;
FAR/F&A Advisory;
InSight; and
Credit.
Because each of these 'bullets' have
much deeper backgrounds, we will be
going into each in our next two issues.
Although the bottom up approach is
high on the agenda, management com-
mitment is key. Ton Toebosch spent
much of the final day with the group,
questioning findings and perceptions,
as well as answering queries from the
Hoor on DGRI and the multi-domestic
concept (see pages 8-12). It will be his
task to mandate the resources needed to
achieve what has been called 'the migra
tion of the craft operations of most offices
to the more standardized US/Australian
models'. This means that the whole net-
work must move rapidly towards the
60/40% F&A/others portfolio that has al-
ready been achieved in the American and
Australian markets. While this is a clear
target, the workshop also demonstrated
tending our coverage of the chain from
agri to food; extending our focus from
low value to high value products and
creating the links needed to cross-sell.
In addition, we need to focus on prac-
ticing greater efficiency in our use of
solvency and more active portfolio
management. Migration avenues have
also been established and include
greater transparency on product contri
bution and cliënt profitability, the cre-
ation of F&A-related incentive schemes
and the removal of conflicts relating to
pursuit of bottom line/longer-term
value proposition, the upgrade of RM
skills, enhanced commercial role for
FAR, and re-gearing of the credit
process and risk management skills to
benefit the new proposition. You will
probably agree that the conclusion of
the workshop - the challenge is big, but
the targets are few - represents the next
step in RI's ongoing evolution into a
global bank in the food and agribusiness.
But with a small, but hugely important
Europe
Corporale lending
Loan Syodiaction
M&A
O LBO/MBO
9 Equity Issues
O Bond Issues
Rest of World
Global F&A wholesale banking
market estimated at USD 790bn,
1988
Considering the volume of deals
and hans, the developed markets
are much larger - specifically, growth
products, i.e., M&A and strategie
advisory take a large share of total
volume
Given the site of RI's current
business and the potential in the
brand, there is ample opportunity
to grow
the recognition that, even though we were
committed to F&A, in the past we have
often lacked the necessary tools to deliver.
How can we overcome that lack? Among
the goals defined by the workshop are ex-
qualification. We may be global, but this
new move towards implementation of our
strategy takes us much closer to the local
and regional environments where our cus-
tomers work.
We will be looking at various aspects of
action plan development in our next issue.
