improving transparency
Cultural shift
Managing our solvency
parties have the ability to escalate issues. Regional managers,
on the other hand, play both an internal and external role.
Externally, they represent the face of Rabobank in their region,
while internally they are the key contact for local knowledge
and expertise. Regional managers also have a broad overview
of business activities in their region, putting them in a position
to take advantage of cross-sell and other growth opportunities.'
The introduction of the matrix structure serves several pur-
poses. Not only does it clarify the roles and responsibilities of
the different management lines; it is also an opportunity to
redefine the business culture within Rl. A structure that is only
on paper does not have the power to change the structure as
it exists in the workplace, however. You determine the degree
of openness, professionalism and thereby the culture that exists
within RI.This includes everything from building relationships
with your colleagues, sharing profit, work and ideas, address-
ing problems as they arise and, if necessary, escalating them.
These are issues that we consider very important and will be
discussed regularly during the year.'
'As a Triple A-rated bank, we have and will be monitoring our
Tier 1 ratio closely. Our strong organic growth in recent years
has increased our solvency requirements. In addition, the Group
spent nearly 2.5 billion on acquisitions last year, an enormous
amount that will probably exceed our 2006 net profit. As a re-
sult, we expect a decrease of our Tier 1 ratio and the Group will
need to focus more on our solvency to maintain the required
ratio of Tier 1 >10%.
'Rl has increased the net profit targets to 570 million for 2007,
while the increase in allocated solvency will be limited. We do
not expect margins to increase either. This means that we all
need to focus more on return on solvency in order to realise
our budget. Cross-sell will become even more important as
a way of increasing returns. Cross-sell, particularly between
6 j The Word Issue 13*February 2007
