THEME
- COUNTRY BANKING
Fertile ground
PIBA's steady growth
national Retail Director, 'The "country banking" strategy has come
about through a combination of vision and opportunity. Like many
innovations it's not happening to a detailed plan bttt according to
the opportunity. It starts with the RI people in offices around the
globe. These people know their markets inside out. They are best
qualified to analyze the opportunities, consider the implications
and possibi 1 ities and make the initial inquiries.' RI Dublin has been
operating as wholesale bank in the Irish market for the past eight
years and has built up a lot of credibility. 'We knew the market
quite well,' Murphy explains. 'The presence of Rabobank's leasing
(De Lage Landen) and insurance (Interpolis) subsidiaries here had
further increased our understanding of the Irish market and culture
while heightening the integrity of the Group's reputation in the
financial services industry.'
The Irish market featured many characteristics that made it highly
attractive to Rabobank. In spite of its small size, Ireland has had
extremely strong economie growth for the last 10 years, earning it
the 'Celtic tiger' nickname. The great economie boom increased
wealth per capita dramatically. Given this wealth creation, a robust
Anglo Saxon legal environment, steady political landscape and en-
couraging demographics - a very young, well-educated population
it's obvious whv Ireland presented an ideal prospect. 'In addi-
tion,' says Murphy, 'the Irish banking market is generally a little
pricier than others in terms of provision of banking services, be
they loans or deposits, and so represents a highly profitable market
for the Group.' Furthertnore, Rabobank surmised that the Irish
banking market was consolidating and the concentration of the top
banks was not as pronounced as in some F.uropean countries (such
as the Netherlands and the UK). These reasons pointed to the
potential for Ireland as fertile ground for growing the range of RI
activities to include International Retail.
Continu&d on page 11
Fergus Murphy:'lreland is fertile ground for RI growth...'
Acquired from the West Australian govern-
ment in Octoher 7 994, the Primary
Industries Bank of Australia/New Zealand
(PIBA) was Rabobank's earliest foray into
international retail banking. Working with
PIBA's existing management to grow the bank
by combining PIBA's bistorical strengtbs in the
rural area with Rabobank's global experience,
the experiment bas proved bugely successful.
Firstly, PIBA's capital and funding structure
bas been greatly improved with access via a
guarantee to Rabobank's Tripte-A rating.
Secondly, PIBA bas been expanded from a
one-product shop into a multi-product shop,
strengthening its competitiveness. The product
offering now includes leasing, insurance, in-
vestments and funds management, risk man
agement (specifically interest rate risk, com-
modity risk and currency risk), seasonal
finance and payment services.
Tbirdly, Rabobank has extended PIBA's dis-
tribution network from eight sales offices to a
total of 57. Sales have been organized as
closely as possible to the customers by central-
izing all administrative, credit, control and
operational functions. This investment in back
office processes has vastly enhanced the oper
ational environment for PIBA staff.
The results to date are very positive. Today
the Rabobank Group has about A US$ 12 bil-
lion in assets in Australia and New Zealand.
Net profits on average are increasing 30-40
percent per year and has topped AUS$ 100
million. Despite this strong growth, credit
losses have been minimal through positioning
PIBA as a premium brand only available to
the best producers.
These improvements have greatly strength-
ened PIBA's position, while simultaneously
launching the Rabobank brand in corporate
P&A in Australia. A process of rebranding
PIBA to more closely align it to the Rabobank
brand will be undertaken in the near future.
I RI The Word I 9
