Dear colleagues,
EDITORIAL
We hope you enjoy this edition of The Word.
As of the 1st of this month, our revised governing structure is
in place. We now have a Wholesale MT and an International
Retail MT. While details are available via RI's intranet site
Meeting Point, it's important to reflect on why we made
these choices. We believe that this is the right way to
organise ourselves to achieve the objectives stated in the
Rabobank Group Strategie Framework 2009 - 2012.
For Rl this means having a clear Food and Agribusiness (F&A)
focus internationally and pursuing an all-finance provider
strategy in the Netherlands. The driving force behind this
focus is the objective to the return to a more balanced
bank by; generating stable income growth, repositioning
of activities in light of current market developments, a
balanced set of cliënt facing businesses, less dependency
on group funding and leveraging the F&A value chain
by building on our core customers.
The revised governing structure is a key ingrediënt to fulfil
these objectives. The Wholesale organisation led by Sipko
will focus on professional products and corporate clients.
The aim is to reach a higher level of cliënt intimacy. We
need to move away from a product approach and instead
focus on cooperation, promoting cross-sell throughout
the businesses, and most importantly focus on our clients.
The additional experience of the newly appointed senior
bankers Lex Kloosterman and Jan van Nieuwenhuizen will
strengthen our commercial capabilities in this respect.
The Retail organisation led by Berry will focus on farmer
fïnance, direct banking and our retail operations.To grow
the retail business in a sustainable way, emphasis will be
put on strengthening the deposit base either through
direct banking or retail operations. Governance within the
retail organisation and setting up a framework to facilitate
exchange of our knowledge and expertise in farmer fïnance,
retail and direct banking are two other aspects Rl Retail will
focus on the coming period. Although the retail banks in
our portfolio are large banks in an Rl context, they have
small market shares in the countries in which they operate.
To seize their unleashed potential, a majority ofthem need
additional management attention and investments in their
operations.
The support functions (Control, Risk Management, ITOPS,
HR, Communications, Legal, Tax, Compliance, Corporate
Secretariat, etc), will support both organisations. With the
revised governing structure, we are in a better position
to create more value for our clients in both Rl areas and it
enables us to generate stable income growth; the topic of
this issue's cover story.
During the months of August and September, we presented
the Rl interim results across all regions. Rl realised a relatively
good result, with a total income of EUR 1.94 billion and
a gross result before impairments and tax of EUR 1.25
billion. This gross result was almost twice budget and
reflects a strong GFM performance and an ahead-of-budget
contribution by Corporate Banking andTCF.The significant
impact of impairments illustrated the deteriorated economie
climate, which resulted in a net result of EUR 257 million for Rl.
The challenges will continue with the dampened economie
outlook for the latter half of 2009 and into 2010. Yet, there
is a growing frequency of positive media headlines. For
instance in the United States, where the crisis began, the first
signs of recovery are showing. What these signs are and how
we as Rabobank are seizing the opportunities can be read
in this issue's region special.
The sector special features Special Asset Management (SAM)
and their proven value to clients caught up in the economie
downturn. The bottom line is that no one gains from
bankruptcy. SAM works with clients to put flexible financial
measures in place, striving to reach arrangements that
ensure cliënt sustainability. In cases of successful conclusion,
Rabobank has realised unparalleled levels of cliënt intimacy.
The credit crisis reminds us how important the basics of
banking are. Five key value drivers underpin our defïnition
of balanced banking: strict cost management, efficiënt
allocation of capital, minimising expected loss and
provisions, proper liquidity pricing and increasing stable
income. If we continue to be disciplined in these banking
principles as illustrated in this edition's banking special,
we will emerge stronger and more balanced from the
current crisis.
Rabobank has been able to make gains relative to peers in
the banking landscape. At the same time, as we are all well
aware, continuing recessionary pressure is impacting our
clients and thus, ourselves. For the second half of 2009, we
need to excel our business where we can in a profitable
and sustainable manner. Given the new market realities,
we are confident that there is ample room for Rl to seize the
opportunities with our clients across the F&A value chain.
Sipko Schat Berry Marttin
Executive Board member Executive Board member
issue 2i 'i i THE WORD 3