Rabobank changes in step with its customers and their world

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.

Sound foundation

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.

A familiar sight in the streetscape and online

The growth in the number of customers in the 1960s led the Raiffeisen and Boerenleen banks to open branch offices in the large cities and in new housing estates. Rabobank has become a familiar part of the streetscape in the early 1970s with a total of more than 3,000 branch offices. Customers visit the branch office much less frequently after the dawn of ATMs in the 1980s, payment terminals in the 1990s and internet banking in 2000. The number of branch offices decreases as a result.

The rise of internet ushers in a number of new developments and Rabobank is one of the pioneers. It is one of the first banks in the Netherlands to offer a diverse range of products and services via the virtual channels both for retail and business customers. The introduction of mobile phones and tablet computers means customers now have Rabobank literally at their fingertips.

The organisation expands and consolidates

In order to offer a number of new activities in the second half of the twentieth century, the organisation is expanded to include specialised subsidiaries and affiliated companies such as Interpolis (insurance), De Lage Landen (leasing) and Robeco (asset management). While they offer their financial products to customers via the local Rabobanks, they are legally-speaking subsidiaries or affiliated companies of Rabobank Nederland. This gradually leads to the creation of the Rabobank Group.

A converse development takes place in the early part of this century. Rabobank concentrates on the core banking activities in the Netherlands and on strengthening the international position as a bank for the food and agricultural sector. Several subsidiaries and affiliated companies are divested.

International activities

Rabobank also launches activities outside the Netherlands starting in the early 1980s. It initially does this for its business customers who conduct international business. The bank opens branch offices in the key financial centres in the 1980s. It is a period of growth and expansion. Retail banks are acquired in agricultural areas including Australia and in the US state of California. Rabobank launches International Direct Banking (IDB) in 2002. It is a supplementary growth strategy through which it taps into the new possibilities that internet offers for savings and banking.

Rabobank develops from a purely Dutch bank into an international financial services provider for its Dutch customers and into a global food & agribusiness bank.