Rabobank, Henk Adams IYC Regional Conference PPT Slides

A CO-OP BANK’S RESILIENCE THROUGH CRISES

Presentation byHenk Adams

3 October 2012

1 About Rabobank, 3 Oct. 2012

INTRODUCTION TO RABOBANK

About Rabobank, 3 Oct. 20122

Working for people, by people


Our logo signifies

For:• Our staff• Our customers• Our stakeholders


‘People are core for us’

4

Our Roots

UnitedKingdom

France

Spain

Republic ofIreland

GermanyBelgium

Luxemburg

Italy

Switzerland

Portugal

Denmark

Norway

Sweden

Austria

Poland

Czech Rep.

Hungary

Ukraine

Slovakia

RomaniaCroatia

Mont..

Bulgaria

Greece

Lithuania

Belarus

Serbia

Latvia

Turkey

Kingdom of the Netherlands

• Length: N-S +/- 300 KM• Width: E-W +/- 200 KM• Population: 17 million

The Netherlands


versus Singapore

• E-W 42 KM• S-N 22 KM

The NetherlandsA Land Of Water: 1/3 Below Sea Level


The Netherlands:A Land of High Quality Agriculture

• Agriculture accounts for 10% of Dutch national product

• World’s biggest producer of cut flowers

• Europe’s vegetable garden

• 3rd biggest agricultural exporter in the world!


RABOBANK IS A STRONG,

SUCCESSFUL BANK…..


Rabobank is the 2nd largest association in the Netherlands with nearly 1.9 million members

x 1,000 members


…with an extensive network and high market shares in the Netherlands, …

-139 local banks with 853 branches

-Strong and stable market shares:

• Agriculture 84%

• Savings 39%

• Mortgages 28%

• SME 43%


…a global spread of activities, …

• 47 countries

• 766 foreign branches

of which appr. 600 retail branches


…after more than 115 years of positive results (and not paying dividends)…


Rabobank has a strong capital position, …

Capital ratios as at June 2012: Capital EUR 45.2 bln

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

J une 09 Dec. 09 J une 10 Dec. 10 J une 11 J un-12

Tier 1-ratio

Core Tier 1-ratio


• Tier-1 ratio:16.9%

• Core Tier-1 ratio: 12.7%

Retained earnings

& minority interests

67%

Member Certificates

15%

Hybrid capital18%

For over 10 years, Rabobank ranks among the Top-10 Safest Banks in the world


1. KfW Germany

2. Bank Nederlandse Gemeenten (BNG) Netherlands

3. Zürcher Kantonalbank Switzerland

4. Landwirtschaftliche Rentenbank Germany

5.Landeskreditbank Baden-Württemberg - Förderbank

Germany

6. Caisse des Depots et Consignations (CDC) France

7. Nederlandse Waterschapsbank Netherlands

8. NRW.BANK Germany

9. Banque et Caisse d’Epargne de l’Etat Luxembourg

10. Rabobank Group Netherlands

11. TD Bank Group Canada

12. Bank of Nova Scotia Canada

13. DBS Bank Singapore

14. Oversea-Chinese Banking Corporation (OCBC) Singapore

15. United Overseas Bank Singapore

“World’s 50 Safest Banks’ list”,

Aug 2012

THE BASIS OF THIS SUCCESS IS

THE COOPERATIVE NATURE


16

To understand Rabobank 2012, it is good to go back to where it all started1895 - 1898

First Cooperative Banks founded in the Netherlandsinspired by the initiative of Mr. Raiffeisen in Germany

Dignitaries and wealthy farmers:• provided savings money and • helped managing the cooperative. Some became voluntary members.

PRINCIPLES:• Obligatory membership for borrowers• Members fully liable for the entire debt of the cooperative• No shareholding• No dividends• Profits to be retained to build equity capital

Friedrich Wilhelm Raiffeisen,founder of the very firstagricultural co-operativebank in Germany.


1898

Establishment of two separate cooperative banking groups:

Raiffeisenbank, predominantly in the North and

Boerenleenbank (Farmers’ Credit Bank), in the South

• Local banks had to pay up share capital in their Central Bank pro rata with their size

• But still no shareholding by members in their local cooperative bank

• No dividends to individual members

• Profits retained to build equity

17About Rabobank, 3 Oct. 2012

1898 – 1972Successful growth and mitigation in liability

Successful growth of:

• Number and size of local banks and the two central organizations

• Capital growth through retained earnings


1965-1972 Increased competition between the two groups on local and central level

1970-1972

• Merger process of the two Central Banks

• Followed by mergers of (competing) local banks

• Field of operation limited to designated local area

• Limitation of member liability


1972Merger into Rabobank

• All RAiffeisen member banks and BOerenleenbank member banks became member of the newly formed RABObank

• 1,200 local cooperative member banks

• 3,000 offices


And with a unique Cross-Guarantee

• Autonomous local banks are liable for each other’s obligations (1st level)

• Ensures intra-Group credit support (2nd level)

• Rabobank Group is treated as a consolidated entity for regulatory, accounting and credit rating purposes.

De LageLanden

SchretlenRabobankNederland

Rabo Mortgage

BanksLocal Rabobanks


2012:Members and autonomous local bank remain the basis of Rabobank

10 million clients1.9 million members

139 local cooperative Rabobanks 853 domestic branches

Ownership andcross-guarantee

division: Rabobank International Rabobank Nederland

Specialised subsidiaries asset management, real estate, leasing, mortgages



Regional Delegates Assembly

LocalMember

Bank

LocalMember

Bank

LocalMember

Bank

LocalMember

Bank

LocalMember

Bank

LocalMember

Bank

Central Delegates Assembly (“Parliament”)

1.9 mln members

139 member banks

12 region assembliesmeet every 3 months

2 delegates per bank:1 member, 1 manager

6 delegates:4 members, 2 managers

Cooperative governance in 2012

Central Delegates Assembly

72 delegates

48 members + 24 managers meet every 3 months



General Assembly

23

Supervisory BoardRabobank Nederland (elected)

Executive Board Rabobank Nederland (appointed)

History of membership policy

1896-1972 - Borrowers have to be member

- Unlimited member liability

1972-1982 - Limited member liability

1982 - Member liability waved

1982 - 2000 - No active recruitment of members

1995 - 2000 - Evaluation and revaluation of Cooperative values

(The Cooperative Debate)

From 2000 - Recruitment of ‘more members’

From 2001 - Appreciation of more involved members


In short: members make the difference

• Putting the cooperative philosophy into practice

• Real involvement

• Members are more loyal and better customers


“Imitating the competition is the most widespread disease in management”

“Being different offers greater future prospects than being better”

Michael Porter

25

PHILOSOPHY:

Re-defined strategy:Balance between being social and being commercial


Core Objectives

Core CSR Values

Defined by:


meaning

Size necessary to fulfill mission, while safeguarding the strength through controlled growth

“As large as is necessary, as small as possible”

STRATEGY FOR GROWTH:

Strategic Core Objectives


Achieving all-finance market leadership in the Netherlands

Extending our position as a leading international food & agri bank

Most sustainable, socially involved bank

Corporate Social Responsibility (CSR) Core Objectives


Safe and sustainable food supply

Promoting economic participation and access to financial services

Supporting community involvement

Clean production methods and sustainable energy

Cooperative Banking in 2012


• Focus on customer interests: Good products-appropriate advice - service excellence

• Connect with society: Cooperative dividend - Community sponsorship

• Connect with the future: Focus on young people – Innovations (Rabo Project Fund) with emphasis on long term sustainability

• Rabobank Foundation: Supports disadvantaged people, domestically and abroad

• Rabo Development: Non-controling investments in rural banks to support banking infrastructure in 7 developing countries.

To summarize:

• A cohesive structure with a bottom-up decision making proces

• a conservative strategy

• a modest and selective growth

• a modest target for return on equity

• strong focus on long-term performance and long term relationships

• strong capitalisation and

• the highest possible level of creditworthiness


The cooperative nature of Rabobank did essentially not change in more than 115 years and is the basis for:


This cooperative nature,

combined with healthy results

and a strong balance sheet,

allows Rabobank to fulfill its

mission as a social enterprise

also for the future generation.

Thank you !

Documents

Rabobank, Henk Adams IYC Regional Conference PPT Slides