SYDNEY
STRATEGY WATCH
ii r
more difficult and expensive. For all Rl
offices, it means being much keener on
the liabilities side of the balance sheet -
we do have, after all, the ability to raise
deposits ourselves in our local markets.
These deposits represent the counterbal-
ance to lending. In the long run, RI
needs a better balance in its liquidity
profile. Again, this issue warrants
further discussion beyond the senior
management meeting.
TW: Wbile these issues are certainly of
concernwe should not forget that the
bigger picture is extremely good.
RD: Y es, contpared to the issues of the
past we are talking 'luxury problems'
now. RI is heading for another record
result for 2003. In all regions, we are
performing well. The U.S. is presenting
very promising returns with relatively
low risk costs. South American and
I.atin American countries are also doing
well, especially Brazil. Europe is grow-
ing stronger. ACC is a major factor in
this, but also outside ACC, l ondon has
made a major step forward and is
expected to write black numbers as an
office (inclusive of GT) for the first time
in many years. In fact, almost every
European office has improved results
considerably. When we look to Asia, we
see that it is making money and is con-
sidered an opportunity area again. India
and China are perceived to be specific
growth spots. Australia is doing
extremely well and because of this we've
decided to speed up development - the
plan there is to achieve 300% growth
over the coming strategy period.
1'roduct-wise, Corporate Finance and
Global Financial Markets are very suc-
cessful, but also most of the other
product-lines are performing above
budget. And last, but not least, we seent
to have our loan loss provisions under
control. Although it is early days and
there is still ample room for improve-
ment, the trend seems to be very
positive in this area of business as well.
TW: What's the practical outcome of
this success
RD: Now we have achieved a stable and
profitable position in all regions, we are
able to leverage our global network
structure to greater effect. This goes
for both front and back offices. For
instance, the I.atin American credit com-
mittee meets regularly by phone with the
General Managers of the region to dis-
cuss credit applications in the various
countries. This cooperation is having
immediate results, such as Chile's
initiative to feed Brazilian derivative
structures into the Chilean market -
6 I The Word I
