A banker should always understand the clients needs 5 Our clients increasingly view us as a core bank and we need to be in a position to assume this leading role Peter Howell Cost efficiency Allocate capital efficiently Balanced choices What this means ultimately is making the right - balanced - choices. We have to make conscious decisions about where we allocate capital and we have to set the right price 0n risk. And we have to safeguard our assets by making sure that customers are able to repay their loans. This increased focus on balanced banking may have been triggered by the crisis, and it is more important now than ever, but at the end of the day the need has always been there. It's about the quality of our clients and the quality of our decision making. Balance is essential, especially when you have to decide whether to lend to new clients or continue funding existing clients. The challenge is to weigh all the elements of balanced banking - the five value drivers - in all our decisions. Ultimately, it comes down to human judgement, so it is vital that any decision on funding should also be based on an in-depth assessment of a customer's sector, business model, individual situation and operating environment. And any decision should be based on more than just margins. For instance, is a cliënt willing to give us more business? This is not a one-way street, and we should be leveraging our cliënt intimacy and existing lending relationship to expand our share of our clients' banking business. 4 Peter Howell, General Manager at RI's London office, has witnessed lots of ups and downs in his 30-year career in banking, and he has seen how growth can be counterproductive if it is too rapid. Balanced banking is much more about steady - and sustainable - growth. He says: "It's basic banking and not really that new for Rabobank. Rabobank's strengths are the result of balanced banking. However, now we have to increase our efforts to get the balance right." The current banking environment is an opportunity, he says. "We're a triple A player with a tight focus and high-quality products. Our challenge is to stay aligned with our strategy and execute it well. It's also about looking at ourselves in a more positive light and doing what we do better than anyone else." Obviously, all five of the value drivers are important, Howell says, but the main drivers for him are those over which his team has more influence: income, costs and provisions. The bank allocates capital to each business. "It's up to us to then use that capital as efficiently as possible, maximising income, managing costs and minimising losses. In the current downturn, provisions are a fact of life but risk management should still be at the forefront of everyone's mind. Cross-sell is vital to the success of RI's revised strategy, with its strong focus on Food and Agribusiness clients, and GFM's London business has been remarkably successful in selling products to RI's core clients. This year, they've doubled cross-sell revenues from GFM products year on year. 'The increase of quality revenue from our core clients using our existing product platforms is the essence of balanced banking." However, he adds, the bank will need new customers to continue growing, but they have to be the right clients and the right deals. "Our clients increasingly view us as a core bank and we need to be in a position to assume this leading role. Balanced banking makes development of these key relationships and delivery of RI's strategy an attainable and sustainable proposition." ISSUE 21 THE WORD

Rabobank Bronnenarchief

blad 'RI The Word / The Word' (EN) | 2009 | | pagina 33