efficiency
Balancing the portfolio
Callan Oltmann
Higher level of quality
'It was a strange situation,' Blom confirms, 'so we set up the Latin
America Credit Committee (LACC).' The committee is made up of
Senior Risk Managers and Credit Officers from New York and Latin
America, and is very involved in structuring deals. The last thing
you want is for a Relationship Manager to agree to a deal with a
cliënt and then go back a week later and say the credit committee
doesn't like it,' Blom explains. 'It's very important that Credit Risk
Management is involved in discussions with the cliënt right from
the start.' This hands-on approach helps create consistency in the
credit approval process across the region. As a result, the LACC
now hasa much higher approval limit of US$ 30 million.
North America also has its own Country Banking Credit Committees
(CBCC), one for agribusiness and one for general commercial
activities. But whilst the LACC is the result of regionalisation, the
CBCCs are a product of RI's strategy to become the premier food
and agri bank in the United States. 'What we did was build the
agribusiness to complement the commercial business,' explains
Callan Oltmann, Head of Retail Credit Risk Management for the
United States. 'We've balanced the portfolio fairly well to where
it's 50% agri and 50% commercial today.'
Both the LACC and the CBCCs operate in the same way. The
credit risk model is exactly the same in North America and
Latin America,' says Blom. 'What's different is the clients, the
economies, the laws and the documentation.' It is these
differences that make local knowledge vitally important.
Argentinean law may mean a deal is structured in a totally
different way from one in California. 'From a regional perspective
it's about setting the parameters for how you do business in the
local offices,' adds Blom.
Focusing on local knowledge with regional coordination creates
a higher level of quality in the region and because of this, there
is more willingness to give the regions more autonomy. As a
result, decision lines get shorter, communication improves and
the cliënt receives better service. Blom believes that regionali
sation helps the cliënt in other ways too. 'Because of our regional
approach, we have a wider perspective on their sector. We can
put it in a wider context.'
A regionalised approach to credit risk management also
benefits the organisation. 'It's about efficiency and focusing
the knowledge base,' explains Oltmann. Blom concurs: 'It
allows you to create a knowledge base in the region that's
beneficial to the organisation, both in your approach to the
market and in delivering your product.'
The Word 21
