Global food agri bank
International retail banking
The credit crisis also caused many structures that had been financed with money market
paper to be difficult to finance. Examples include Asset Backed Commercial Paper (ABCP
conduits) - i.e. collateralised money market investment vehicles - and Structured Investment
Vehicles (SIVs) - i.e. off-balance sheet investment vehicles. Over the past few months,
the ABCP market has started to show a split, with high-quality programmes still able to
finance themselves and the lesser quality programmes, including SIVs, gradually
disappearing from the market. Despite the crisis and thanks to its high-quality programmes,
Rabobank still succeeded in refinancing its maturing commercial paper. At year-end,
Rabobank Group had EUR 23 billion in ABCP outstanding, largely for the financing of its own
originated loans and for customer loans and receivables. A relatively minor part concerns
so-called securities arbitrage programmes. Since the benefits of these programmes will
largely diminish as a result of the Basel II regulations in force as from 2008, Rabobank Group
is considering a winding down of these structures. Rabobank sponsored a SIV called 'Tango',
in which it had a 10% shareholding. Since the situation regarding SIVs shows no signs of
improvement in the short term, this position has likewise been wound down. After the other
investors had bought out more than EUR 5 billion in assets, the remaining Tango assets
(EUR 4.8 billion), will be recognised on Rabobank's balance sheet in January 2008. This will
have no effect on profit and loss.
Rabobank Group intends to be the best food agri bank, with a strong presence in the chief
food agri countries. For growth in food agri, Rabobank International focuses on
expansion of its retail banking activities in traditional agricultural countries such as the
United States and Australia. In addition, the focus will be on emerging countries with fast-
growing food agri sectors, both in Central and Eastern Europe and in countries including
Brazil, Chile, China, India and Indonesia.
Rabobank Group has bundled its food agri knowledge in Food Agri business Research
and Advisory (FAR). This department operates from the Netherlands, the Americas, Asia and
Australia. FAR researches the important food agri sectors and, with this knowledge,
supports many transactions in various stages, gives its opinion on loan proposals,
contributes to merger and acquisition proposals and generates ideas for new products.
In addition, it produces a large number of publications each year, exchanges visions with
clients, and gives insight in production, trade and consumption in important food agri
sectors by producing world maps. Production in 2007 included publications on the biodiesel
market in South-East Asia and the market for orange juice in Brazil.
Early in 2007, a special Clean Tech department was established within FAR. This department
conducts research into enterprises that use clean technologies, such as biofuels, biomass,
fermentation, and wind and solar energy.
Over the past years, Rabobank Group's international retail activities have significantly
expanded. This was mainly due to growth of the existing retail banks, to acquisitions and to
new activities. Rabobank International has retail banks in the regions Europe, the Americas,
Australia and New Zealand, and Asia. In addition, clients are being served via the Internet
banks in Belgium, Ireland, Australia and New Zealand.
Europe: interest in Bank BGZ expanded
In Europe, Rabobank International's retail banking operations are ACCBank in Ireland and a
46% interest in the Polish Bank BGZ. Traditionally, ACCBank has always had close links with
the agricultural sector. ACCBank also has a share in the large market for real estate financing
in Ireland. In 2007, Rabobank International increased its interest in Bank BGZ from 37% to
46%. Bank BGZ is an important bank to the Polish agricultural and food processing sector.
In view of its agricultural background, Bank BGZ offers excellent perspectives for further
expansion of the international retail banking business. The collaboration with Bank BGZ was
intensified in 2007. Besides Robeco investment funds, Bank BGZ now also offers lease
products from De Lage Landen to its clients.
