New domain
On the horizon
From small seeds
foreign hands, hence the EBRD's involvement.
We do, eventually, hope to take over EBRD's
15% share, however.'
Kolff continues: 'Sometime this year we aim
to expand our presence in Eastern Europe
through the acquisition of a majority stake
in a Russian bank. We're already involved in
negotiations, but we haven't hit upon the
right formula, as yet. Adding a Russian bank
to our portfolio will fulfil our Central and
Eastern European ambitions, for the time
being. Poland and Russia are both large
countries with large populations and we're
confident that we're finding the right bal-
ance between agribusiness and retail
activities in these markets.'
The key issue in any new retail domain is
the starting position and the development
of the liability side of the balance sheet.
Kolff explains, 'Ideally, there should be an
ample savings surplus on a local basis and
the best starting position is, therefore, the
acquisition of a savings bank. In India, for
example, we recently acquired a 20% stake
in Yes Bank. This private bank was recently
established by two former General Managers
of Rabobank India Finance and is planning
an IPO this spring.'
In the middle of December, Rl signed a letter
of intent with theTurkish Sekerbank. This is
very much a "country bank",' says Kolff. 'It was
formed in 1953, by sugar beet co-operatives,
and has around 3,000 employees and 200
branches all overTurkey. If all goes well, we
will acquire a 51% stake in Sekerbank in April
2005. Normally, we're not one of the first
movers in an emerging country, but we will be one of the first
international banks to enter theTurkish retail market. Turkey
has a large young population and is currently experiencing
the fastest economie growth in the whole of Europe.'
In China, Rabobank is involved in talks with the Zhejiang Rural
Credit Cooperative Union retail bank, which has branches all
over the Hangzhou district. Kolff reveals, 'We're starting out in
a purely advisory capacity, but our ambition is to become more
involved in the future. This is our first, tentative move into retail
banking in China and it should prove to be a good learning
experience. Alongside this initiative, we will assist in restructuring
the co-operative banking system of the total province, which
includes many outlets in rural areas of Zhejiang.'
And plans are afoot on the other side of the world too. 'In Brazil,
we have been building up our wholesale banking business for
some time and we're now looking at the possibilities in retail
banking, to balance our agribusiness portfolio. We will start out
by investing in primary industry and see how things evolve
from there,' Kolff reports.
'There's no magie involved in international acquisitions,' says
Kolff. 'We make sure that any potential acquisition fits within the
"country banking" profile and then follow a well-defined process.
It usually starts out very informally and it's very important that we
get the right feeling about each other. Once a letter of intent has
been signed, we enter into a due diligence process. This can lead
to further discussions on the precise details of the acquisition or
even abandonment of the deal for any number of reasons.'
Once a deal is completed, a member of the Rl staffis appointed
to the board of the new member bank. 'I must stress, however,'
Kolff says, 'that this is not always to impose Rabobank metho-
dology. We'd prefer to see a constant exchange of know-how
and employees between our foreign acquisitions and our Dutch
operations.' To this end, Rabobank is currently setting up a new
International Retail team to form a bridge between its in-house
6 The Word
