1 introduction rabobank group - agrobanco · rabobank’s roots bank processor rabo development all...
TRANSCRIPT
12.40
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Rabo Development A story on Development and Impact
3
Rabobank’s roots
Bank
Processor
Rabo Development
All Finance banking in Netherlands 1981 Opening of first international branch in
New York 1988 Triple A credit rating 1990 Merger with Interpolis (Insurance) and
strategic alliance with Robeco (investment)
1994 Acquisition of PIBA Bank (Australia) 1996 Rabobank Group acquires the venture
capital company Gilde Investment Management
2001 Robeco becomes a 100% subsidiary of the Rabobank Group
2002 Obvion is established, a joint venture of Rabobank and ABP, aimed at selling mortgages via intermediaries
2003 Rabobank acquires FGH Bank 2004 Partnership with Eureko (Achmea) 2005 Merger Interpolis and Eureko.
Rabobank acquires a 38% share. 2012 Acquisition of Friesland Bank • International activities • All finance banking
Retail banking in NL 1960 Start serving private individuals (a.o.
savings & mortgages) 1969 Establishment of DLL (Leasing
Company) 1972 Merger of the Raiffeisen and
Boerenleenbank into Rabobank
• Mature retail bank • Start of salary payment through
bank accounts in the Netherlands: - new segments -> private
individuals - also in urban areas
1895 Cooperative banks 1898 Foundation of the Cooperatieve
Centrale Boerenleenbank (Eindhoven) and the Vereniging van Raiffeisenbanken en Landbouwverenigingen (Utrecht)
• Rural bank for farmers and rural
SMEs (no private individuals)
Development of total assets: 1960: EUR 2 bln 1978: EUR 34 bln
June 2012: EUR 771 bln
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Rabobank Group’s Characteristics
Mission
Structure
Business style
Strength
Maximising customer value.
Autonomous local cooperative banks. All earnings retained in the group. Rabobank Netherlands self-owned apex.
Focusing primarily on long term relationships with customers
Broad (All Finance). Decentralised. AA rating. In global top 25 largest banks.
Rabo Development
Mission
Structure
Business
style
Maximising customer value.
Autonomous local cooperative banks. All earnings retained in the group. Rabobank
Netherlands self-owned apex.
5
Rabobank Group’s Values
• The interests of our customers and members are key
• Delivering the best possible solutions to our customers
• Offering continuity in our services, thereby serving our
customers’ long-term interests
• Showing commitment to our customers and their
environment, thereby assisting them in realising their
ambitions
• Involved
• Nearby
• Leading
• Respect
• Integrity
• Professionalism
• Sustainability
Core values Rabobank Group Brand values Rabobank
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• Focus on customers’ interest
• Member involvement
• Supporting local communities
• Working together
• Members’ council and cooperative dividend
• Social involvement
• Long term relationship with customer
• Meaningful contribution to economic development in
local area
Cooperative characteristics Rabobank
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Profile Rabobank Group
International financial services provider based on a cooperative organisation principle
• Retail banking, wholesale banking, asset management, leasing and real estate
• Operating in 47 countries
• 10 million customers around the world
• 766 offices outside the Netherlands
• 61,103 FTEs (total Rabobank Group)
Local Rabobanks in the Netherlands
• 139 independent local banks in the Netherlands
• 7,6 million customers (of which 6.8 mln retail clients)
• 1,9 million members
• 826 offices
• 27,272 FTEs
• 2,898 ATMs
High credit rating by S&P, Moody’s and DBRS
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Key figures Rabobank Group
(in EUR billions) 2012 (year end) 2011 (year end) 2010 (year end)
Net profit 2.1 2.6 2.8
Total assets 752 732 652
Total equity 45 45 41
Current & Deposit accounts 334 330 299
Loans to customer 488 468 460
BIS ratio (%) 19.0 17.5 16.3
Core tier 1 ratio (%) 13.2 12.7 12.6
Efficiency ratio (%)
65.6 65.2 64.5
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Members and local cooperative banks form fundamentals of Rabobank Group
10 million customers (of whom 7,6 mln in NL)
1,9 million members
139 local cooperatives
Rabobank Nederland
Specialized Subsidiaries
Rabo Development
One man, one vote
Voting based on size
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Governance Rabobank Group
Regional Delegates Assembly
Regional Delegates Assembly
Regional Delegates Assembly
Central Delegates Assembly
Non-executive Board Rabobank Nederland
Executive Board Rabobank Nederland
General Meeting
Non–executive + executive board
of local member bank
# 12
# 139
# 1,9 mln members members
Recommendations and decisions
Non–executive + executive board
of local member bank
Non–executive + executive board
of local member bank
members
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Central Delegates Assembly
• 4 times per year
• Representatives of each region, 72 members
• “Parliament” of the Rabobank Group
• Responsibilities of Central Delegates Assembly:
Debate, advice and decide
Making policy on:
– Strategy
– Budget
– Internal transfer pricing
– Internal rules
– General affaires
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General Meeting
• Once a year
• 139 local banks with about 1.500 participants
Responsibilities of General members meeting:
• Approval Annual Report
• Approve changes Articles of Association
• Appoint non-executive Board of Directors
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Governance local Rabobank
Rabo Development
Customers
Members Council (30-50 persons)
Non-executive Board of Directors
Executive Board of Directors
Members
15
Local Members Council
• 30 to 50 delegates chosen by members
Responsibilities of Local Members Council:
• Appoints supervisory board;
but especially discussion about direction and policy of the bank;
• Approval of annual report;
• Discharge non-executive board and executive board
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Cross-guarantee scheme is the foundation of unique strength
• Rabobank Group is treated as a consolidated entity for the regulatory supervision of solvency,
liquidity and other controls
• Effect of the cross guarantee system:
• Consolidated balance sheet
• Important for financial markets
• Better use of capital as it can be leveraged through whole organization independent of where it is located
Local member banks are mutually liable for financial obligations
Rabobank Nederland
Subsidiary 1
Subsidiary 2
Subsidiary 3
Level 1
Level 2
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Rabo Development’s roots and mission
Rabobank was founded in 1898 by farmers who did not have access to
financial services. Today, more than 4 billion people worldwide do not have
access to financial services.
Rabo Development’s mission:
Drawing on Rabobank’s cooperative heritage and banking knowledge in the
Netherlands, Rabo Development aims to increase access to financial
services in developing countries that have substantial potential in the food
and agri sector.
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In 1989 Rabo International Advisory Services (RIAS) was established to offer technical
assistance to (rural) banks in developing countries. In 2006 RIAS became part of Rabo
Development, basically with the objective to:
• Contribute to the wellbeing of world citizens by deploying (financial and non-
financial) resources for stimulating rural development around the globe (social
responsibility)
• Give substance to the cooperative legitimacy of Rabobank
• Enter into strategic alliances with (rural) banks in developing countries that are
important exporters of agri commodities. This way Rabobank intends to create a
network of partner banks that can be considered as part of the global Rabobank
network.
Origin of Rabo Development
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• The contribution that Rabo Development makes to the development of the partner
bank initially consists of three elements: capital, management services and technical
assistance.
• Rabo Development does not want to take a majority shareholding. It will look for
consensus views with the other main shareholders. Rabo Development finds it
important that the partner bank is locally owned.
• Profit maximization is not the ultimate objective. The highest ambition is to generate
maximum customer value and a sustainable enterprise.
Key elements of Rabo Development’s objectives
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• Little or no commercial banks involved in rural banking
• Typically involvement of state dominated banks
• Micro finance institutions lack scale and ability to grow with their customers
• Financial service delivery is fragmented and targeted to specific customer groups
• Traditional lending is mostly based on collateral
Observations in rural banking
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• Lack of infrastructure precludes efficient outreach to customers
• Enabling environment is often suspect (collateral value is questionable, land titles are often an issue)
• Lack of scale at farm level
• Agriculture often not seen as a purely economic activity
• Poor supply chain organisation: power remains with the traders
• Banking environment sometimes distorted by donors, government and development banks
• Poor financial literacy
Hurdles to take in rural banking
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• Rural banks also need urban presence
• Banks need to serve all client segments with the right mix of products, services, channels and people
• Sufficient scale and market share is vital
• Banks need to focus on both sides of the balance sheet (asset and liability products)
• IT is key in increasing outreach efficiently, using direct channels (ATMs, mobile banking, internet banking, PoS) next to a physical branch network
• Rural banks need specialised knowledge centers on SMEs and agri
• Alignment between all stakeholders is a must
Key lessons learned in rural banking
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Partner banks:
Rabo Development aims to develop existing financial institutions into leading, sustainable local retail banks with a rural orientation and client focus. This is accomplished through the provision of technical assistance and management services after taking minority equity interests. The strategic partnership will be mutually beneficial to these financial institutions, the Rabobank Group and their respective clients.
Advisory services:
By providing knowledge on Food and Agri, retail banking and cooperatives, Rabo International Advisory Services (RIAS) aims to:
• Assist partner banks
• Create leads for new partner banks
• Provide services on demand to the Rabobank Group and its clients
Rabo Development’s strategy
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Rabo Development’s Business Model
Rabo Development
investments and HR resources
policy support and financial resources
Rabo Development
Access to Rabo network
Board membership
Technical assistance
Equity investments
Management services
partner banks
Access to finance (CSR)
Return on investment
Commercial linkages (F&A)
Talent development (HR)
Rabo Group Donors
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Context of Rabo Development’s activities
Financial Services
Multilaterals
NGOs
Government
Access
to
financial
services
Equity Technical Assistance Management Services
Sharing international and cooperative banking knowledge and experience
Enabling Environment
Policy Dialogue Financial Instruments
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Rabo Development partner banks and advisory projects 2013
-
Rabo Development
Partner banks
Advisory projects
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Key figures of Partner Banks (2012)
Rabo Development
Bank 2012
Country
Rabobank's stake
Outlets
Employees
Customers (x 1,000)
Assets (x EUR million)
NMB Tanzania 35% 147 2.777 1.488 1.340
URCB Hangzhou China 9% 141 1.976 1.720 11.075
ZANACO Zambia 46% 123 1.220 636 850
Banco Terra Mozambique 49% 9 158 26 50
Banco Regional Paraguay 40% 38 686 68 1.650
Banque Populaire du Rwanda Rwanda 35% 189 1.455 1.486 200
Banco Sicredi Brazil 26% 1.208 15.098 2.265 11.600
DFCU Uganda 27,5% 30 600 120 350
1.885 23.970 7.809 27.115
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Rabo Development within the Rabobank Group
Rabobank Foundation
- Development of cooperatives, microfinance and sustainable agri value chains in rural communities of developing countries
- Project based through grants, guarantees, (soft) loans and consultancy
Rabo Development
- Create access to financial services in developing countries with F&A potential through rural retail banks
- Investment in, and development of partner banks through financial investment, delivery of management services and technical assistance
Rabobank Group
- Rabo International
- F&A Banking
- Local Member Banks
- Retail banking
- Group entities
- Leasing, insurance, etc.
Sustainable cooperative banking with involvement in the F&A value chain
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Rabo Development organisation structure:
• Management Team (3 members)
– 30 employees
– 20 long term expats
• Shareholders council
• Executive Board
Governance structure related to partner banks:
• Local retail banks with a strategic investor
• Minority equity participation: an influencing role
• Board directorship (2 members per bank)
• CEO and EMT participation
• Contractual control over key decisions, e.g. strategy
Organisational structure Rabo Development
MT
Investment Management
Agri
Advisory
Banking Advisory
Communications Finance & Control
Secretary Office
HR
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• Linking partner banks to each other • Linking partner banks to the international network of Rabobank • Linking Rabobank’s existing client base to the value proposition of its African
partners
Commercial opportunities with partner banks
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• Warehouse Receipt Finance in the Cashew sector via a three partite agreement
• Increased small scale cashew farmers outreach from zero in 2005 to more than 200,000 in
2011
• Integrating the value chain, connecting parties in the F&A chain
Tanzania
Bank
Cooperative Processor
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BPR Mobile Banking
Launched September 2010, currently more than:
• 110,000 customers using BPR Mobile
• 8,000 client contacts on average per day via
the mobile channel only
• Works on every cell phone
Functionalities of BPR mobile banking, regardless the
client’s (often rural) location
1. Balance Inquiry
2. Mini-Statements
3. Money Transfer to other BPR Accounts
4. Prepaid Airtime
5. Bill Payments
Rwanda
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Capacity Building project rural cooperatives
Rice - UCORIBU: Capacity building of 10 cooperatives, 18,000 members, Sponsored
by Rabobank Foundation and supported by ICM and USAID (post harvest handling and
storage)
Tea - Assophté: capacity building of the Assophté tea cooperative (5,000 members)
sponsored by Rabobank Foundation and supported by Sorwathé (US owned tea
factory) and OCIR Thé
Dairy - project related to Inyange, a leading dairy processor: improving the supply
chain of fresh milk linked to Inyange, sponsored by Rabobank Foundation and
supported by Land O’Lakes.
Capacity Building Agri Finance BPR
- BPR & AGRIfin World Bank
Rwanda
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Launch Subscribers (by end of 2011)
Nov 2008 350,000
Aug 2009 550,000
Sep 2010 110,000
The success of mobile banking
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• VCF assesses the payment capacity of the farmer by looking at his delivery record rather than his credit record
• Collateral is still important but could be lower if performance record is strong
• VCF especially works in integrated sectors such as sugar, tea, barley, tobacco, dairy, poultry and less in grains
• VCF mainly works for working capital financing (e.g. inputs)
• Tri-partite agreement is basis of VCF structure
• VCF creates a win-win for the farmer, the processor and the bank
Value Chain Financing (VCF)
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• Exporting Farmer-based Organisations (FOs) have an advantage compared to locally selling FOs
• The export contracts can be pledged to banks whereby the foreign buyer pays directly in the bank’s account
• In fact, it is also a form of value chain financing
• Social lenders (e.g. Rabobank Rural Fund and Root Capital) are specialised in PXF
• Eligible sectors especially are coffee, cocoa, sesame and tea
Pre-Export Financing (PXF)
Cooperative Collection
Cooperative Storage
Coffee farmer Production
Importer Cooperative export
Cooperative transport
Cooperative processing
Rural Fund
$ loan
$ coffee purchase
Coffee supply
Payment by importer
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• WHR financing needs a solid WHR system
• Farmer Organisations are well positioned to pool the production of farmers
• WHR financing is post-harvest financing (in contrast to VCF)
• The bank can rely to a large extent on the value of the underlying commodity
• The ideal WHR system is integrated in a commodity exchange (mitigating market risk), e.g. SAFEX in South Africa
• NMB Tanzania is financing cashew and coffee PCS successfully linked to the cashew and coffee auction
• Unfortunately the implementation of WHR financing is challenging, especially in Africa
Warehouse Receipts (WHR) Financing
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R 27 G 66 B 152
R 0 G 0 B 0
R 127 G 127 B 127
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R 242 G 242 B 242
R 225 G 235 B 244
R 227 G 244 B 236
8.40
Colour order (left to right, top to bottom)
R 59 G 110 B 143
R 251 G 193 B 119
R 115 G 198 B 161
R 103 G 153 B 200
R 186 G 163 B 171
R 191 G 191 B 191
R 127 G 127 B 127
R 201 G 48 B 146
R 27 G 66 B 152
R 84 G 7 B 91
R 248 G 152 B 29
R 241 G 237 B 238
R 254 G 234 B 210
R 211 G 227 B 237
Any questions?
Rabo Development
12.40
6.40
6.80
5.80
0.80
1.20
7.80
8.80
9.00
0.20
0.20
12.40 7.90
7.50
Guides for gutter
Text colours
R 27 G 66 B 152
R 0 G 0 B 0
R 127 G 127 B 127
Background shading
R 242 G 242 B 242
R 225 G 235 B 244
R 227 G 244 B 236
8.40
Colour order (left to right, top to bottom)
R 59 G 110 B 143
R 251 G 193 B 119
R 115 G 198 B 161
R 103 G 153 B 200
R 186 G 163 B 171
R 191 G 191 B 191
R 127 G 127 B 127
R 201 G 48 B 146
R 27 G 66 B 152
R 84 G 7 B 91
R 248 G 152 B 29
R 241 G 237 B 238
R 254 G 234 B 210
R 211 G 227 B 237
Thank you for your kind attention https://www.rabobank.com/en/rabo_development/index.html
Rabo Development