cross-selling
Change of focus
Adriaan Weststrate
'When I joined Rabobank, in 1993, we only had two offices outside
New York, in Dallas and San Francisco,' says Bob Bucklin, Managing
Director and Chief Corporate Banking Officer. 'I remember having a
philosophical discussion with a senior Rabobank International (Rl)
manager about how we weren't interested in the role of lead bank in
major transactions. We did have aspirations in that direction, however,
and feit it was imperative if we desired to be considered the premier
F&A financial institution in the United States. Today, we have over 55
relationships in which we are the lead bank.'
Over the following decade, Corporate Banking has gradually added
more and more products to its portfolio. 'Working with Global
Financial Markets (GFM), we set up a debt products group and
developed a highly professional and competitive derivatives desk,'
Bucklin continues. 'We have since added a securitisation team in New
York; a commodity repo team in Structured Trade Finance; an
integrated M&A team; and, in conjunction with De Lage Landen,
we've also developed leasing products. In 1997, we set up our own
dedicated Food Agribusiness Research (FAR) team. Among the
reports they produce, the annual Food Agribusiness Outlook report
for North America is highly appreciated by both our corporate clients
and Rabo AgFinance clients.'
Starting with just a single C-1 cliënt (annual revenues in excess of US$
1 million) in 1995, Corporate Banking now has 44 C-1 clients. 'We use
credit as a base product, but credit in itself is not always profitable,
especially where large, investment-grade clients are concerned,' says
Adriaan Weststrate, Managing Director of Rabobank Internationals
Atlanta office. 'It was, therefore, essential that we build on our credit
cliënt base by offering them a much wider product portfolio.'
In 1998, Corporate Banking began to focus on cross-selling between
product groups, which involved a change of focus for Relationship
Managers. Business Manager Kanta Rajkumar implemented various
new procedures to facilitate the tracking of cross-sell revenues and
developed a highly accurate system that ties in with the bank's general
ledger. 'Relationship Managers know how they are measured and that
this is directly related to the cross-sell and revenue objectives,' says
Rajkumar.
In 1998, Corporate Banking's revenue from cross-sell products was
around 9%of total revenue. 'Our goal wasfor30%ofourtotal revenue
to be derived from cross-selling,' says Bucklin. 'We have achieved or
exceeded that goal every year since 1999 and, in 2004,
the figure was as high as 45%.'
Weststrate's Atlanta office has been instrumental in this
success. 'In 2004, we derived 61 of our total cliënt
income from cross-selling and we look forward to the
implementation of the RAROC (Risk Adjusted Return on
Capital) model, which will further assist us in our dealings
with investment-grade clients,' says Weststrate. 'A great
example is that of the AGCO Corp. We have underwritten
a total of almost US$ 4 billion in transactions for this
company over the past 10 years, starting with AGCO's
acquisition of Massey Ferguson, in 1995. We've since
underwritten further acquisitions in Brazil, Germany, USA
