Rabo Securities

Rabo Securities are the equity investment banking arm of the large Dutch co-operative banking federation Rabobank. Rabo Securities deals with a number of areas that an investment banking arm of a major bank would usually deal with. These include share issues, mergers and acquisitions, equity research and stock trading. They are particularly focused on equities rather than fixed income, which is unusual for a medium sized investment bank.

Rabobank has a particularly strong position in mergers & acquisitions, particularly in the Netherlands where it is the second most active investment bank in this field, helping both Dutch companies and foreign companies that wish to buy firms based in the Netherlands. This is partly due to their majority stake in the Amsterdam based boutique firm Rembrandt Fusies & Overnames, also known as Rembrandt F&O, which concentrates on mergers for small and medium sized clients. It does not deal in the work that Rabobank would deal with, having a limit of 30 million Euros on any deal and it will not advise on deals in the food or agriculture sectors. Rembrandt F&O has advised on 175 mergers or acquisitions in recent years in a wide variety of sectors. Within the larger mergers, Rabobank has three divisions, Food and Agricultural, Financial Sponsors and a General Industries group that deals with all other types of industries Rabo Securities has 38 offices outside the Netherlands, in places such as London, New York, Singapore and Toronto.

Rabobank is essentially a collection of credit unions. Credit unions were a popular way of allowing savings to be accumulated and small loans to be made that originated in nineteenth century Bavaria. The aim was to cut down the influence of extortionate money lending which could throw many poor people into deeper poverty. Although there were credit unions in the towns as well as the countryside, it was primarily a rural phenomenon in the Netherlands, and Rabobank was the result of a merger of two credit unions, one based on protestant churches and one organized by the Catholic Church.

Rabobank, due to its agricultural roots, has always been a specialist in financing for agricultural projects. It has maintained this as it has expanded outside the Netherlands, selling itself as an agricultural specialist. However Rabobank Securities does not have any dealings in commodity futures, focusing on equities.

Another area where Rabo Securities specializes in is research into securities in the Benelux countries. Benelux is a shortened version of the names of the countries Belgium, the Netherlands and Luxembourg, which have since the second world war have run similar regulatory and economic regimes and due to their relatively small size have been seen as one entity by external investors. However, the Benelux countries are well developed and open economies with large and successful international companies as well as being the center for many markets and governmental institutions.

Unlike many other Dutch institutions Rabobank and Rabo Securities have not needed government intervention to stabilize them. This has included such Dutch competitors as ING Bank and ABN AMRO which have international presences. With the collapse of FORTIS bank as well, which is now owned by both the Dutch and Belgian governments, Rabo Securities has now got a good deal less competition. Rabo Securities has maintained this solvency (it has a highly coveted AAA rating from most of the ratings agencies) by concentrating on its credit union business. The bank is in fact owned and controlled by hundreds of local credit unions which are owned by their borrowers and depositors and whose officers are elected by a vote of all the members. The credit union sector in general has benefited from this perceived security with an influx of deposits.