World number 1 in the food agri market
International ambitions
Global food agri strategy
16 Rabobank Group Annual Report 2004
Strategy
The new Rabobank' is a local bank of sufficient size and quality to be
able to provide complex financial services to clients independently
and which at the same time is small enough to still fulfil the promise of
being 'near-you' and 'committed'. A precondition for this is upscaling
through mergers aimed at quality and efficiency enhancement.
This model is supported broadly, as is evidenced by the many mergers
of local Rabobanks now in progress. This trend will develop in line with
the new 'Rabo map'of the Netherlands, which was adopted by the
local Rabobanks in the year under review and which comprises 150
operating regions and an equal number of larger local banks.
The move towards a smaller number of larger banks will not affect the
'near-you' promise. Indeed, by using innovative distribution formulas it
will go hand in hand with an extension of the number of client interface
points. The number of interface points is expected to increase by 10%
to 3,200 in the years ahead.
Upscaling and professionalisation also mean that local Rabobanks will
have more freedom of movement in the future. They are given maximum
opportunities to show local entrepreneurship. The independent service
provision to ever larger corporate clients with more complex financial
needs is an example of this.
Internationally, Rabobank Group is building on its intrinsic strengths.
These lie chiefly in its extensive knowledge of and experience in retail
banking and the food agri business. Rabobank Group's international
strategy is therefore primarily aimed at achieving a leading position glo
bally as an international food agri bank, where possible in conjunction
with retail activities in rural areas in up-and-coming countries.
This international niche strategy is directed at having a presence in
the world's major food agri countries and at acquiring a position as
an important financial link in international agricultural trade flows.
The strategy is implemented by Rabobank International, Rabobank
Group's international corporate and investment bank. Accordingly,
Rabobank International pursues a global leading position in serving the
agri and food industry and the international agricultural trading firms.
In order to be a competitive bank for these clients, Rabobank
International also has large multinationals outside the food agri
sector and financial institutions among its clients.
A leading factor in the further development of the international business
however, is to safeguard the continued ability to meet the financial
needs of core clients in the food agri business and to fulfil the Group's
needs in terms of funding and solvency and liquidity management.
Thanks to its global niche strategy, Rabobank International has established
solid positions, particularly in Australia/New Zealand and the USA,
where food agri-related retail activities have also been developed via
selective acquisitions.
In emerging food agri countries: focus on retail
activities first
Besides in the established countries, Rabobank also wants to build
positions in emerging countries with a large food agri potential.
An important feature of these countries is that the agricultural sector is
on the eve of a number of consolidation cycles and that, consequently,
the majority of the food agri businesses operating there will initially
still be small in size.
That is why, in emerging countries, Rabobank International is initially
interested in acquiring or participating in banks with a strong retail
position outside the big cities among private individuals, small and
medium-sized enterprises and in the primary agricultural sector. In this
context, Rabobank International is looking especially at countries such
as China, India, Indonesia, Brazil, a few countries in Central and Eastern
Europe and Turkey. At the end of 2004, Rabobank International acquired
a 35.3% interest in the Polish BGZ bank and signed a letter of intent for
the acquisition of a majority interest in the Turkish Sekerbank. The move
in Poland was made in collaboration with the EBRD, which acquired
a 15% interest. Together, they are BGZ's new controlling shareholder,
where formerly this was the Polish state.
Once they have grown into mature economies, the emerging countries
will offer new opportunities. Parties that will by that time have developed
into large players in the food and agri industry, but also the agricultural
exporters, can then be served from Rabobank International's corporate
and investment banking network. Meanwhile, the international retail
activities, including those related to the food agri business, are showing
very strong growth. ACC Bank, in Ireland, showed the strongest growth
in 2004, with lending up by more than 50%. The long-term target for
the international retail activities is to account for 50% of Rabobank
International's result.
European collaboration
In Europe, Rabobank focuses on intensified collaboration with its
(cooperative) partners in the Groupement Européen des Banques
Coopératives and the Unico Banking Group, which was founded back
in 1977 by Rabobank and a number of fellow European cooperative
banks. Unico Banking Group has since made an important contribution
towards the development of an international orientation at Rabobank,
which was practically non-existent at the time. Today, Rabobank
considers it its duty to explore the possibilities of further defining and
extending the collaboration with its Unico partners, which is partly of a
commercial and partly of an operational nature.
