Low risk
Treasury
Rabobank
Group(TRG)
Long-term funding (LTF)
Corporate Center (CCS)
Global Financial
Markets (Rl)
Rabo
Hypotheek
Bank
(RHB)
Market
Short-term
liquidity
Member
Central
Treasury (CT)
Long-term
funding
Rl Commercial
Units
Obvion
Other
Group
Entities (FGH)
Lage
Landen (DLL)
banks. For example, during November 2008, GFM sales were
able to place, via reverse inquiry, Rabobank bonds with French
institutional accounts."
Looking back over the previous eighteen months, Gower says
there has been a very significant change in the nature of what
it means to be a global funding business. "Prior to June 2007,
the buil market essentially meant an increase in borrowing
requirements was translated into an increase in price. In other
words, if you needed money and were willing to pay for it, it
was available. That direct correlation is no longer there. As a
result, the nature of investors' requirements has also changed,
because no one knows which bank may struggle in the future.
Investors are now looking for much more information from
borrowers about what they are doing and how they are doing
it, and they are also being very picky about which underwriters
they do business with."
For Gower, this has meant a significant increase in the amount
of face-time with investors, talking about Rabobank's position.
"Every extra euro you raise today is more time and labour
intensive than in the past. It often involves face-to-face
dialogue, often at management-board level, with investors."
However, it's Rabobank's uniquely robust position that needs
to be pushed within the financial community, Gower believes.
"We need to re-educate the world as to why Rabobank is low
risk. Investors globally have gone back to basics and are now
deeply sceptical and take nothing for granted. Credit analysis
is starting over from scratch, and any large bank or borrower
is being looked at very carefully. Our investor relations
activities add much value in that sense. One of Rabobank's
unique selling points is that we're the only triple A privately
owned bank in the world. Pre-credit crunch we were placed
alongside agencies, governments, and government-guaranteed
agencies. We're now very much regarded as a bank - albeit
the highest rated bank. However, we believe over time this
will change, given the inherent low-riskof our balance sheet."
With this in mind, Gower notes that Rabobank never lost
access to investors during the crisis. 'This has been one of our
primary successes. Even in 2008 we've achieved our volume
goals. The markets recognised that over the past five years
we've been a very strategie borrower that cares about
how our bonds perform. We're in a strong liquidity position,
meaning we're able to buy and sell our own bonds, so we
can help investors get in and out of the market when they
want to. So investor loyalty is significant."
ISSUE 18
THE WORD