The Rabobank Group stems from a collection of small agricultural cooperative banks founded on cooperative principles. Farmers and horticulturists began setting up these agricultural cooperative banks at the end of the nineteenth century in order to meet their individual need for credit. The cooperative basis and principles form the common thread running through our history that spans more than 115 years.
The founding father of cooperative agricultural credit is the German rural mayor Friedrich Wilhelm Raiffeisen. In the 1860s, he founded an agricultural credit union to fulfil local farmers’ credit needs. This association provides members with credit from the savings it collects locally. Raiffeisen’s idea of setting up credit cooperative also catches on in the Netherlands. The first agricultural cooperative banks are established in the Netherlands from 1895 onwards.
Farmers and horticulturists establish agricultural cooperative banks across the rural regions of the Netherlands. They are the owners, members and administrators of the bank and as such are collectively responsible for it. The profits are not paid out to the members, but are instead added to the reserves each year. This is how they build a sound foundation.
Based on Raiffeisen’s principles, the first Dutch local banks establish two umbrella organisations in 1898: the Coöperatieve Centrale Raiffeisen-Bank in Utrecht and the Coöperatieve Centrale Boerenleenbank in Eindhoven. These two organisations form the central bank for the Local Member Banks and facilitate them in a number of areas. They also play a key role in promoting their interests vis-à-vis the government and in developing a positive image among the general public. The two centralised organisations merge in 1972 to form Rabobank Nederland, a cooperative of which all the local Rabobanks are members and shareholders. This remains the case to this very day.
There are 67 agricultural cooperative banks affiliated with one of the two centralised banks in 1900. There are no less than 1,324 member banks at the high point in 1955. This number then begins to decline due to local mergers. It is a gradual process at first and then picks up speed from the 1990s. Mergers take place with a view to efficiency, economies of scale and improving the services. The regulators’ requirements with respect to buffers, supervision and risk management strengthen this development.
Rabobank advertising from 1968: Agricultural Cooperative Bank
The origins of small cooperatives of farmers and horticulturists are rooted in villages and cities of the Netherlands in the twentieth century. More and more Dutch individuals become customers of the local Raiffeisen or Agricultural Cooperative Bank. ‘Agricultural Cooperative Bank, the bank for everyone’ is the fitting slogan in this commercial from 1968. (In Dutch only)
Expanding range of services
The originally small credit cooperatives of farmers and horticulturists become rooted in Dutch villages and cities. The need for banking services grows in tandem with the changing economy and society.
The banks welcome more and more small and medium-sized businesses and larger companies as customers in the second half of the twentieth century. Growing numbers of retail customers join the local agricultural cooperative bank from the 1960s onward.
The development of automation and ICT makes this possible. Giro payments take off with a flying start. Large employers are the first to begin paying salaries through the bank rather than in cash. Smaller companies quickly follow in their footsteps. Private individuals also begin to make more and more giro payments. The banks introduce new products, such as payment cheques and giro collection forms. Accountholders begin visiting the bank more frequently from the moment that salaries are deposited into bank accounts.
While the cooperative bank originally concentrates on lending and savings, it expands its range of services in the 1960s, 1970s and 1980s. Private individuals can turn to the bank for home mortgages, payments, investments and insurance. There is also a period during which Rabobank sells holidays. The banks expand their range of services for business customers to include services in the field of business financing, leasing, payments and insurance.