RNA has now become
a more interestinmodel
for international growth
Dan Stevens, CFRO for Rabobank N.A.:
RNA has an interesting model because its retail network
enables the west-coast community bank to actively market
for retail deposits and full service banking relationships. In the
first two quarters of thisyear, RNA increased its self-funding
ratio from 60 percent to 80 percent. "And that is without
the money we get from government-supported agencies or
deposits that we buy from other banks," comments Stevens.
He credits the growth spurt to RNA's community involvement,
its sponsorship of the Tour of California, and beefed-up
marketing and branding. "We have highlighted Rabobank
Group's safety and soundness in a time when a lot of
competitors are going through a rough stage."
Further inland in the US, Mark Grass, Chief Financial Officer
(CFO) at Rabo Agri Finance (RAF), supports a network of
relationship managers who are located throughout the
primary agricultural producing areas of the US. RAF provides
real estate and operating loans directly to farmers, but does
not take deposits. lts current funding is 100 percent
derived from the Wholesale network in New York. "But that
is changing," explains Grass. "Since the mandate to explore
self-funding alternatives, we have identified the AgVantage
programme offered by the Federal Agricultural Mortgage
Corporation (also known as Farmer Mac) as a perfect funding
source for the longer term real estate-based financing that
we provide to our customers. Approximately 70 percent of
AgriFinance's portfolio is real estate-based, and our initial
estimates suggest roughly USD 1 billion in loans will qualify
for AgVantage funding. Over time, we believe that 40 to
50 percent of our lending can be sourced through Farmer
Mac. At this point the remainder would have to be covered
through the Wholesale desk, although we continue to actively
explore additional self-funding alternatives." There has been
A i
some studying of whether or not internet banking through
International Direct Banking (IDB) would be a viable option,
but at this time the appropriate structure is uncertain. Not
only are funding possibilities somewhat limited, RAF also
feels the squeeze from increased liquidity costs. The costs of
funding have risen sharply with the need to match fund
Dan Stevens
Berry Marttin
Mark Grass
ISSUE 25 OCTOBE
RI WORLD