Our strategy has altuays been
to choose those companies that can
survive the worst aownturns J
REGION SPECIAL NORTH AMERICA
Bob Bucklin:
Incredible year
Downturn
26 issue 21 THE WORD
Ronald Blok
Bob Bucklin
4
Not all retail banks are back in shape again,
says Ronald Blok. "The Federal Deposit
Insurance Corporation (FDIC) is contacting
us several times every week with proposals
to buy a bank or loan portfolio. In most
cases, we are not interested and, to be
honest, the difficulties of other banks create
opportunities for Rabobank. Compared
to most retail banks on the West Coast,
Rabobank is doing very well. Our triple A
rating makes us attractive to people with
savings. Our deposits have been growing by
18% for consecutive years now, way above
average."
The credit crisis seems to have had a
Darwinian effect on banks. It is now literally
survival of the fittest in financial markets.
Rabobank seems well adapted to deal with
the current economie environment. "We are
going to have an incredible year, going by
our half-year results," comments Adriaan
Weststrate, Head of Corporate Banking,
Eastern US, at the Atlanta corporate banking
office. "Our credit and loan income is 118%
higher, our network income is 95% better,
and our income from cross-selling has
improved by 74%. One explanation for these
exceptional numbers is that, in the current
economie climate, many other banks are not
willing to lend, becauseofa lack of liquidity.
But if you are banking the right clients and
understand your industries, as Rabobank
does, you can step up and help out."
Banking the right clients seems an obvious
choice, especially in a harsh economie
climate. But who are the right clients?
Rabobank in North America selects survivor
sectors and survivor companies within the
domains of Food and Agribusiness (F&A).
"Even in the best of times, F&A markets are
cyclical," explains Bob Bucklin. "Sometimes
they are in sync with the economy;
sometimes they are totally out of sync. But
we are used to dealing with cyclicality in F&A.
Pork, beef and poultry - they are all cyclical
industries. Our strategy has always been to
choose those companies that can survive the
worst downturns. We bank the people who
are long-term survivors."
Adriaan Weststrate cites the poultry industry
as an example. "The poultry sector had a very
difficult year in 2008. Rabobank only banks
the survivors in this industry and, based on
our in-depth knowledge of the industry, we
are willing to continue to support our clients
in very difficult periods and get rewarded
for that.
"Our cliënt, Pilgrim's Pride, the largest poultry
company in the world, even had to file for
Chapter 11 bankruptcy protection. We
supplied USD 100 million in debtor in
possession (DIP) financing at the end of last
year, and within five months they were able
to repay the DIP down to zero, just as we
had predicted. Because of our unwavering
support to the company, we have now been
mandated to lead their exit financing for a
total of USD 1.65 billion. I always say that if
you understand your industries and know
your clients, you look forward to an industry
downturn to make money for the bank."
Looking forward to a downturn might not
be in everybody's books, but in the field of
mergers and acquisitions, it's also noticeable
that a crisis presents opportunities, according
to Emmanuel Durand, Global Head of M&A
for the Americas. "The financial sponsors
have disappeared from the market, which,
together with the reduced availability
