Dear colleagues
EDITORI AL
lt has been roughly half a year since the last edition of
The Word landed on your desk. Much has happened in
the meantime. The effects of the credit crisis that erupted
last year are still being feit across the market place. Market
turmoil continues to affect financial institutions, spilling
over into consumer goods varying from food to furniture.
Despite all this volatility, Rabobank is still as solid as a rock.
Internationally, we continue to provide clients with products,
pricing and services that are in their best interests and on
the best terms possible.
We can't pretend that the credit crisis left Rabobank Group's
2007 results unscathed. Our Rabobank International invest-
ments portfolio contained a limited indirect exposure in the
form of Residential Mortgage-Backed Securities (RMBSs) and
Collateralised Debt Obligations (CDOs). These have been
re-valued with €284 million from profit and loss and €127
million from reserves. Relative to our peers, Rabobank was
capable of limiting the impact. This can be attributed to our
diversified activities and a strong Dutch home market.
It is important now to leverage our potential in Rl by collabo-
rating across the borders of our regions and business units.
For instance, there is great, as yet unleashed potential in The
Netherlands and European regions, firms that are both rela-
tively small and large, seeking to expand across borders, often
to other neighbouring countries. But also to South and North
America, Asia and Australia. Rabobank International offers them
all the advantages that only a triple A bank can in today's
market. We are a committed, solid and reliable supplier of
capital to our clients. Through teamwork and collaboration,
by joining forces within Rabobank, we show our clients the
great strength of ourorganisation.
Our role is crucial in the face of new challenges such as the
explosion in soft commodity prices. Whether it is grains, sugar
or oil seeds, prices are reaching levels that show 30%, 40%
and even 200% increases. Hedge funds and the demands of
increasingly affluent emerging markets, like India and China,
are stirring up the mix. Yet, what does this mean for our
clients? Some are producers looking to maximise the upside
of higher prices by adding production capacity. In the middle
and at the end of the food chain, traders and retailers alike,
face margin squeezes as supply becomes more expensive
relative to negotiated contracts for demand or prevailing
consumer prices. As a leading Food and Agri bank, we are
committed to the consumer and commercial clients in these
markets. We support them with the necessary additional
liquidity requirements. In some instances, we have helped
clients to improve cash flow by replacing their futures posi-
tion with an over-the-counter swap.
It is cliënt intimacy in these turbulent times that gives us a
head start on our rivals. Our clients and especially corporate
clients are looking for a financial partner that thinks with
them on a strategie level.They are looking fora house bank.
One that helps them realise their goals and ambitions. In
addition to providing them with strategie advice, this also
means finding opportunities for bundling our products and
services to meet their specific and broader needs. Well struc-
tured cross-selling really shows that we think alongside our
clients. This means coming up with customised and at times
complex multi-product solutions.
The above, signals both challenges and opportunities. All the
topics are dealt with in greater detail in this issue of The Word.
We think these articles will provide you with a good overview
of what is important in today's Rabobank International. Our
being able to optimise how we piek up on these important
items, is dependent on our ability to go from good to great.
We have to more effectively mitigate risk, reinforce dient
service and add value to all parts of our business. Collabora-
ting across business units and regions is pivotal to our future.
Hans ten Cate's retirement on 1 July 2008, will effectively
make this the last edition of The Word under his chairman-
ship of the Managing Board Rl. Having extensive experience
in international banking, it has been decided that Bert
Heemskerk, Chairman of the Rabobank Executive Board, will
also chairthe Managing Board of Rabobank International, as
of 1 July 2008. Sipko Schat will continue as Vice-Chairman
and retains his current responsibïlities within the MBRI, while
adding the supervisory directorship of YES Bank. After retire
ment, Hans ten Cate will continue as Supervisory Director of
Robeco (Vice-Chairman) and Rabo Bouwfonds (Chairman)
and Member of the Board of Directors of Rabobank Australia.
Both of us wish to thank you for your contribution to the
success of Rabobank International. We hope you will enjoy
this issue of The Word.
Hans ten Cate Sipko Schat
issue 16 THE WORD
