My hope is that within
RÏ we can create an
intemal marketfor
funding 9
Erik Peek
Erik Peek, General Manager RI Brazil:
Far-flung places
Dick Klaasse
For example, in Argentina we generate deposits in Rabobank North
America. But there is no expectation that we are going to be able
to turn off the tap from intercompany funding offshore, nor does
that make sense. The business we do here is largely export-oriented
and dollar-based. We are not financing local companies that have local
sales with dollars coming in offshore. Our clients are selling across the
world and their business is dollar-based. But we are trying very hard to
determine what we can raise locally, how we can diversify ourselves
and give the bank many different routes to funding."
Erik Peek gives an example of this diversification, when he explains
how Rabobank in Brazil will use part of its newfound BRL 1.5 billion
funds. 'We are now going to develop another segment in F&A which
addresses more local markets in Brazil, such as food processors, dairy
and even retail. Those include smaller companies that work with
the local currency, not dollars. We have to adjust our processes and
technology, to be able to deal with them. But at least part of our
growth will come from BRL-funded lending.' B
as hard as possible to get balance in their funding. It seems to be
everyone for themselves now. At the same time I can understand that
at this stage we are all being pushed to explore our own possibilities as
independent banks, and in the future more mutual solutions might be
developed. But it is quite a big transformation for all the subsidiaries of
Rabobank to go from being totally asset-generating to funding. That is
a completely different ball game. And unfortunately for funding, there
is no one-size-fits-all model."
Guillermo Bilbao believes RI continues to have growth oppor-
tunities in South America, but it cannot be sidetracked by a local-
for-local funding policy. "We should not kid ourselves and act as if
we are a local bank. We are a Dutch bank with a specific appetite
for business, and we need to be careful about what we do. Basel III
is going to put significant pressure on far-flung activities around the
world. Banks are going to focus on those countries where they
have the right scale and proper access to funding. As RI we have
an advantage, but we also need to be realistic about how much we
can do. A lot of banks will have to limit their activities to those markets
where they can access funds in a reliable way.
We are already seeing banks puiling back from faraway places
where they have limited franchises. Basel III has brought an end to
the idea that banks can just open offices all over the place."
He predicts that RI is going to continue to rely on dollars being
transferred into South America from other Rabobank entities.
"We are trying very hard to see how much we can get locally and
determine how much that is going to cost us.
ISSUE 25 ober RI WORLD
