Supported by SAM, the cliënt should
begin tofeel reassured that we are
looking for solutions together
SECTOR SPECIAL GSAM
The process
18 ISSUE 21 r,f.':r 20i THE WORD
that off. Rather, we will look at the company's risk profile and,
if feasible, we might doublé the credit from EUR 100 million
to EUR 200 million and be rewarded with a company that
survives and has a solid credit rating."
For other players within the banking sector, where liquidity
is scarce or long-term relationships are less of a priority, this
approach is a rarity. However, as Weenig explains, Rabobank's
philosophy differs slightly from the norm. "In addition to
having better access to liquidity than most ofourpeers, we
also believe the best approach is to try to save the company.
We're aware that many banks have short-term goals, which
boil down to saving liquidity for the bank, but since we're
a relationship bank, we believe passionately in the medium-
to long-term focus, which means you need to place the cliënt
in the right context, and understand the position they find
themselves in and empathise with them."
During day-to-day business, a Relationship Manager (RM)
within Rabobank deals with a client's needs and reviews
the state of their financïal health on a regular basis. Part of
the review process is an assessment of the Loan Quality
Classification. Once the Loan Quality Classification has
been rated as 'substandard' or worse, management is
transferred to SAM or GSAM. Of course, says Weenig, there
are emergencies, in which case the RM brings SAM in contact
with the cliënt directly. If the client's business is in danger of
imminent collapse, then normal channels are bypassed and
the emphasis is on acting first and doing the paperwork later.
'Take the example," says Weenig, "of a company that will
go bankrupt if it doesn't pay its creditors by tomorrow night.
In such a case, it's a judgment call based on whether or not
the money we put in will ever be returned. And this is based on
the best information available. When we have to act quickly,
the major objective is not to save the shareholder - it's to
save the position of the bank."
As Staal explains, when a cliënt is transferred to SAM, a
meeting is organised with the RM and the cliënt. The meeting
can take place any time from the following day to six weeks
hence, depending upon the urgency of the case. "The RM
knows the cliënt, they know the file, they have the history and
they know how to deal with the cliënt," he says. "The cliënt
is then informed that we will have the meeting and we take
it from there. That's how we organise it internally. From the
client's perspective, they are dealing with Rabobank, so who
they're actually speaking with is not so important.
"We then explain to the cliënt that we are facing a special
type of situation. We explain that we are familiar with this type of
situation, and that there are advantages for them - we have
more time to spend on the relationship, for instance, and that
we have a short line of command and decision making to the
executive board, if required. So it's not as though the butchers
are coming in - no, it's a very special situation and, therefore,
a special relationship. This is a time when the cliënt should
begin to feel reassured that we are looking for solutions
together."
A client's first reaction is often positive, says Weenig,
because they realise that their problems will be considered
from a fresh perspective. "At the end of the day, it's in the best
interests of everyone that we do a good and thorough job,
with everyone coming out operating at full strength," he says.