Added value of the subsidiaries
Identity as strength
'The new Rabobank'
15 Rabobank Group Annual Report 2004
Strategy
In the years ahead, Rabobank Group's ambitions in the Netherlands
are primarily focused on achieving market leadership via the local
Rabobanks. Rabobank Group's subsidiaries and production units will
contribute to this by means of multi-distribution and white labelling.
In order to be both the leading and the largest all-finance service provider
in the Netherlands, the bank's prime focus for the immediate future will
be on further strengthening its position in the insurance market.
Primarily via the local banks
Through the local banks, Rabobank Group occupies an influential and
dominant position in many sectors of the Dutch financial retail market.
This position is the direct result of having been near to the client and
showing strong commitment to clients for over a century.
Sustaining and extending that position is not achieved without effort.
It is vital to remain alert in order to be able to tackle growing competition
and other market developments. For example, in the year under review
an effective response was formulated to the rapidly changing client
demands in terms of the distribution channels through which they wish
to purchase financial services. Channel differentiation and optimisation
of the office network are at the core of this. A proper mix of these two
elements will result in an increased number of client interface points and
lower office space costs. In this way, Rabobank can retain that distinctive
characteristic as the 'bank-near-you' in the Netherlands. In this context,
further expansion of the virtual bank is expected. The fact is that clients
consider Rabobank to be 'near to them' because it is available 24 hours
a day, 7 days a week, via the telephone or the Internet. Not surprisingly,
users voted the www.rabobank.nl website the best financial website in
the Netherlands in 2004.
Market leadership through the local Rabobanks has not yet been
achieved in certain client groups and geographical areas or in some
product markets. That is why in the years ahead the local Rabobanks
are aiming at:
strengthening the position in the upper range of the private
individuals and corporate markets;
reinforcing the market positions in large-city areas, particularly among
private individuals, ethnic minorities and small and medium-sized
enterprises;
growing the market share in insurance, consumer credit and real estate;
defending the large market share in the agricultural sector.
Complementary contribution by means of multi-distri
bution, white labelling and cost sharing
Complementary to the activities of the local Rabobanks, multi-distribu
tion, white labelling and cost sharing can contribute to achieving the
desired market leadership in the Netherlands. Concrete multi-distribu
tion activities have been undertaken in recent years.
For example, Rabobank, in collaboration with the ABP pension fund,
formed the mortgage subsidiary Obvion in April 2002 in response to
the increased popularity of brokers in the mortgage market. In addition,
the well-known Internet broker Alex was acquired from Dexia in 2003.
This acquisition not only resulted in a substantial enlargement of the
client base with active, price-conscious investors, but also in a significant
increase in the number of securities transactions, allowing a major
decrease in the cost per order to be realised. The handling of securities
transactions for Friesland Bank - an example of white labelling - which
was started in 2002, also contributes to the planned reduction in costs.
An example of cost sharing in the field of securities is the cross-border
platform for securities transactions settlement, which was formed in
2004 together with the Belgian KBC banking and insurance group.
The aim of this joint venture is to significantly lower the cost of securities
transactions, which will ultimately benefit the clients.
The subsidiaries of Rabobank Nederland are expected to make a major
contribution towards achieving Rabobank Group's market leadership
ambition. Besides attractive returns from their own autonomous
activities, their goal is to strengthen Rabobank's strategic position and
image both at home and abroad and to improve its overall risk profile.
The subsidiaries fulfil the role of competence centres for the local banks.
In addition, nearly all of them serve their own client base besides that of
the local member Rabobanks.
Rabobank expressly uses its cooperative character to achieve market
leadership in the Netherlands. The members of the local Rabobanks are
tangible evidence that Rabobank is 'a different bank'. This membership
creates a unique opportunity for the bank to strengthen its ties with the
market. If clients truly experience the bank as 'committed', 'near-you'
and 'leading', this offers countless opportunities. It is up to the local
banks to define this further, for instance by making maximum use of the
ability to consult representatives of both members and clients
in member councils, members' meetings and panels. Another
possibility is to set up 'communities' locally, i.e. discussion groups
around selected issues.
The local Rabobanks are accelerating their development into larger
and more self-conscious entities that can also serve the upper segment
of the market. In the year under review, consensus was reached with
the local banks on the outlines of 'the new Rabobank'. This is the out
come of the discussion with the local banks on the 'Rabobank Vision
2005+' policy statement for the future, which was jointly finalised in the
autumn of 2003.