Dear Mr. Marttin, the world is facing an important health crisis due to Covid-19, European citizens are facing a difficult period and are fearing the economic difficulties that will follow. How do you think co-operative banks can play a role in this crisis ?
First of all, I’m thinking of all the families that lost a beloved one and I would like to thank the professionals in hospitals and elderly homes that played a major role in taking care of the sick and elderly.
These are extraordinary times for Europe and it is hard to assess what the impact will be of the Covid-19 pandemic on society and economics. ‘Only a wise person knows what is vital and permanent and lasting and memorable’ to quote sir Winston Churchill.
What we do know is that each and every EU member state is coping with the crisis in its own, but that the real solution for Europe asks for cooperation, sharing best practices on how to deal with the virus and finding ways for an economic recovery. This is to my opinion very important because history shows that a second and third wave can easily follow.
Cooperative banks can show their commitment and perseverance to help entrepreneurs and households through these hard times. Banks are now ‘part of the solution’ where in 2008 we were seen as source of the problem. Taking into account that cooperative banks are very close to their members, customers and local societies, cooperative banks play a special role as stabiliser of the economy. These are the circumstances where the cooperative structure shows its added value by supporting their clients as they are not based on shareholder value, but long term customer relationships.
Happily cooperative banks are financially in good shape. And we will be able to absorb the inevitable losses of clients who will not be successful in surviving this crisis. At the same time, using the buffers as allowed by the supervisory institutions in the context of this crisis, it’s my expectation that supervisors will soon also draw conclusions on the viability of institutions and their ability to meet the capital and liquidity requirements. So for cooperative banks it will remain a balancing act between supporting their clients and not losing sight on being a stable and steady bank.
Mr Marttin, you are also Member of the Managing Board of Rabobank, could you please describe the actions undertaken by your organization to support your customers, members and the society in general during this difficult period ?
Rabobank works closely with the other large banks in the Netherlands like ING Bank and ABN AMRO. Just a few days after the Dutch Government issued a lockdown in the Netherlands, we issued a statement where we offered our SME and corporate clients liquidity support by offering them a postponement of 6 months principle payments. The only condition was that these customers had no delays in interest and principle payments before the lockdown. After this commitment, Rabobank worked together with the other Dutch banks within the Dutch Banking Association to draw up a payment moratorium that complies with the EBA guidelines that were issued on the 2nd of April. Furthermore, we are in close contact with the Dutch ministries of Finance and Economic Affairs to discuss the details of state guarantees for lending to SME, large corporates and corporates in the food and agricultural sector. We advised our clients what actions they can take in order to reduce the economic impact of the lockdown in the Netherlands and worldwide. We also offer our consumers a mortgage payment break if needed. Also the contactless payments limit of EUR 25 was increased to EUR 100 in order to prevent COVID-19 infection at payment terminals. Outside the Netherlands, like in Australia, Brazil and the US we are also providing customized solutions and are closely following the impact of the crisis and are in close contact with our Rural and Wholesale clients and where needed provide them support. All in all these measures will unfortunately not prevent that certain customers will be or become in financial difficulty. The next step is to prepare ourselves for a customer oriented solution. This year Rabobank celebrates its 125th anniversary. During these years, Rabobank and its clients had to cope with several wars, disasters and recessions. History shows we did survive. This inspires me and gives me confidence we will be able to deal with the Covid-19 crisis too.