1. A CO-OP BANK’S RESILIENCE
THROUGH CRISES
Presentation by
Henk Adams
3 October 2012
1 About Rabobank, 3 Oct. 2012

2. INTRODUCTION TO
RABOBANK
2 About Rabobank, 3 Oct. 2012

3. Working for people, by people
3 About Rabobank, 3 Oct. 2012

4. Our logo signifies
„People are core for us‟
For:
• Our staff
• Our customers
• Our stakeholders
4 About Rabobank, 3 Oct. 2012

5. Our Roots
Kingdom of the Netherlands
Norway
• Length: N-S +/- 300 KM Sweden
• Width: E-W +/- 200 KM
• Population: 17 million Denmark
Latvia
The Netherlands Lithuania
Republic of Belarus
Ireland United
Kingdom Poland
Germany
Belgium
Luxemburg Czech Rep. Ukraine
Slovakia
versus Singapore Austria
Hungary
France Switzerland
Romania
Croatia
• E-W 42 KM Mont..
Serbia
• S-N 22 KM Italy Bulgaria
Spain
Portugal
Greece
Turkey
5 About Rabobank, 3 Oct. 2012

6. The Netherlands
A Land Of Water: 1/3 Below Sea Level
6 About Rabobank, 3 Oct. 2012

7. 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!
7 About Rabobank, 3 Oct. 2012

8. RABOBANK IS A STRONG,
SUCCESSFUL BANK…..
8 About Rabobank, 3 Oct. 2012

9. Rabobank is the 2nd largest association in the
Netherlands with nearly 1.9 million members
x 1,000 members
9 About Rabobank, 3 Oct. 2012

10. …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%
10
10 About Rabobank, 3 Oct. 2012

11. 47 countries
…a global spread of •
• 766 foreign branches
activities, … of which appr. 600 retail branches
11 About Rabobank, 3 Oct. 2012

12. …after more than 115 years of positive
results (and not paying dividends)…
12 About Rabobank, 3 Oct. 2012

13. Rabobank has a strong capital position, …
Capital ratios as at June 2012: Capital EUR 45.2 bln
• Tier-1 ratio:16.9%
Hybrid
• Core Tier-1 ratio: 12.7% capital
18%
18%
16%
14%
Member
12% Certificates
10% 15%
8%
Tier 1-ratio
6%
Retained
4% Core Tier 1-ratio earnings
2% &
minority
0% interests
June 09 Dec. 09 June 10 Dec. 10 June 11 Jun-12 67%
13 About Rabobank, 3 Oct. 2012

14. 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
Landeskreditbank Baden-Württemberg -
5. Germany
Förderbank
“World‟s 50 Safest
6. Caisse des Depots et Consignations (CDC) France
Banks‟ list”,
7. Nederlandse Waterschapsbank Netherlands
Aug 2012
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
14 About Rabobank, 3 Oct. 2012

15. THE BASIS OF THIS SUCCESS IS
THE COOPERATIVE NATURE
15 About Rabobank, 3 Oct. 2012

16. To understand Rabobank 2012,
it is good to go back to where it all started
1895 - 1898
First Cooperative Banks founded in the Netherlands
inspired 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
Friedrich Wilhelm Raiffeisen,
• No shareholding founder of the very first
• No dividends agricultural co-operative
bank in Germany.
• Profits to be retained to build equity capital
16 16 About Rabobank, 3 Oct. 2012

17. 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
17
About Rabobank, 3 Oct. 2012

18. 1898 – 1972
Successful growth and mitigation in liability
Successful growth of:
• Number and size of local banks and the
two central organizations
• Capital growth through retained
earnings
18 About Rabobank, 3 Oct. 2012

19. 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
19 About Rabobank, 3 Oct. 2012

20. 1972
Merger 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
20 About Rabobank, 3 Oct. 2012

21. And with a unique • Autonomous local banks are liable for
each other‟s obligations (1st level)
Cross-Guarantee • Ensures intra-Group credit support
(2nd level)
• Rabobank Group is treated as a
consolidated entity for regulatory,
accounting and credit rating purposes.
De Lage
Landen
Rabobank Schretlen
Nederland
Rabo
Mortgage
Local Rabobanks Banks
21 About Rabobank, 3 Oct. 2012

22. 2012:Members and autonomous local
bank remain the basis of Rabobank
10 million clients
1.9 million members
139 local cooperative Rabobanks 853 domestic branches
Ownership and
cross-guarantee
Rabobank Nederland division: Rabobank International
Specialised subsidiaries asset management, real
estate, leasing, mortgages
22 About Rabobank, 3 Oct. 2012

23. Cooperative governance in 2012
1.9 mln members
Local Local Local Local Local Local
139 member banks Member Member Member Member Member
Member
Bank Bank Bank Bank Bank Bank
2 delegates per bank:
1 member, 1 manager
12 region assemblies Regional Delegates Regional Delegates Regional Delegates
meet every 3 months Assembly Assembly Assembly
6 delegates:
4 members,
2 managers
Central Delegates Central Delegates Assembly
Assembly (“Parliament”)
72 delegates
48 members + 24 managers
meet every 3 months
General Assembly
Supervisory Board
Rabobank Nederland (elected)
Executive Board
Rabobank Nederland (appointed)
23 About Rabobank, 3 Oct. 2012

24. 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
24 About Rabobank, 3 Oct. 2012

25. PHILOSOPHY:
“Imitating the competition is the most widespread disease in management”
“Being different offers greater future prospects than being better”
Michael Porter
In short: members make the difference
• Putting the cooperative philosophy into practice
• Real involvement
• Members are more loyal and better customers
25 About Rabobank, 3 Oct. 2012

26. Re-defined strategy:
Balance between being social
and being commercial
Defined by:
Core
Objectives
Core CSR
Values
26 About Rabobank, 3 Oct. 2012

27. STRATEGY FOR GROWTH:
“As large as is necessary,
as small as possible”
meaning
Size necessary to fulfill mission, while safeguarding the
strength through controlled growth
27 About Rabobank, 3 Oct. 2012

28. 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
28 About Rabobank, 3 Oct. 2012

29. 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
29 About Rabobank, 3 Oct. 2012

30. 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.
30 About Rabobank, 3 Oct. 2012

31. To summarize:
The cooperative nature of Rabobank did essentially not
change in more than 115 years and is the basis for:
• 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
31 About Rabobank, 3 Oct. 2012

32. 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 !
32 About Rabobank, 3 Oct. 2012