Dear colleagues
EDITORIAL
A few weeks ago we released Rabobank's mid-year results
and we can conclude it is somewhat disappointing for
Rabobank International having to present a fall in profits
of 88% to EUR 74 million. It is even more disappointing
in light of the fact that 80% of our business is creating
value and solid earnings. However, Rabobank has some
impairment to make up for regarding our sub prime
exposure where related investments dropped from
EUR 318 million to EUR 108 million.
In these market circumstances, actions have been and are
being taken. Global Financial Markets (GFM) scaled down its
non client-related operations following reorientation. More
than ever, we will have to focus on investing in our most
profitable businesses and developing products that truly
support our clients' needs. We also need to be more
client-centred, meaning that we have to understand how our
clients view the stages of their business life cycle, each
of which requires changing and wider-ranging financial
support. To do this effectively, we need to practically
predict what they need, before they ask us. Proactive
advice can be our unique selling point, with cross-selling
of our products as the underlying key.
Cross-selling can only be achieved when we break out of our
silos and work across the bank's businesses. This will require a
different mentality among all of us. However, once mastered,
it will provide a great opportunity for growth, even in diffïcult
circumstances.
On the market side, we will maintain and build out our strong
Food Agribusiness (F&A) position. We also have to become
stronger in other areas like global commodities, private
equity, M&A (Mergers and Acquisitions) and the emerging
renewable energy sector. And we will devote attention to
our international retail banking operations.
It is our international retail banking operations that are the
focus of this edition of The Word. In our interim results, we
communicated a 40% increase from our international retail
activities to EUR 396 million. It is very good to see that all
regions contributed to this growth and especially our Polish
BGZ Bank, in which we took a majority stake last April. We
have to understand that our retail business is at the heart of
Rabobank Intemational's operations. It covers a large part
of what we do around the world and we intend to build on
that particular strength.
The different articles in this magazine strive to explain the
added value of our retail business across the regions. A good
example is the current integration of Hagabank and Bank
Hagakita into Rabobank International Indonesia, which makes
us the biggest foreign bank in that country. It shows how
we are able to enlarge our retail share in the Asian region.
With Indonesia being the fastest rising economy in Asia, big
opportunities are there for the taking.
On the other side of the world, we now have a majority stake
in one of Poland's biggest banks, BGZ. It is a bank operating
in a very similar way to Rabobank in the Netherlands, with
great opportunities in both retail and wholesale businesses.
It also forms a bridge to our Dutch customers doing business
in Poland and vice versa. Poland is one of Europe's major
emerging economies and with BGZ Bank, Rabobank is at
the forefront of these developments.
Our International Direct Banking (IDB) business is also
featured in this issue, as it is one of our true global retail
operations. With IDB, we have enjoyed some great successes
in countries that are diffïcult to penetrate with our Rabobank
brand. Now, in Belgium, Australia, New Zealand and Ireland,
we are known as a very competitive online savings bank.
A great job but we also have to be aware of the current
diffïcult circumstances in the marketplace. Today, it is getting
increasingly challenging to offer clients a competitive
interest rate without affecting profitability. Therefore, we have
decided to strengthen the IDB concept in those countries
where operations are currently running and not to expand
in the near future into new territories. We had not made
provision for this development. On the other hand, we now
can make IDB a success in the current countries based on solid
practical learning from, for example Belgium, where we are
now known as the biggest online savings bank.
Learning, focusing and servicing. These words are at the
forefront and heart of this editorial. Intentionally, of course,
as they provide the key to our success. If we learn from our
successes as well as from our mistakes, focus on our main
clients with what we are good at (F&A fïnance) and deliver
them services that grow from good to great, Rabobank
International will havea promising future.
We wish you all the best in your efforts
to make the second half of2008 a success.
With kind regards,
Bert Heemskerk
Sipko Schat
ISSUE 17
THE WORD
